All Forum Posts by: Kris Wong

You don't seem to be considering vacancy, property management, maintenance, or CapEx in your calculations. If you were to include those numbers, you would find that you would be (are) holding underperforming properties. You have to consider the opportunity cost of keeping that equity (aka cash) tied up, when you could be using it for more productive investments.

A conventional, i.e. conforming, loan requires 25% down on (non-owner-occupied) multifamily property per Fannie Mae requirements. It's been this way for a long time.

https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf

@Jared Sanderson if you have strong W2 income, not having 2 years of rental history shouldn't be a problem, as far as I know. If you don't have strong W2 income, I am not sure what your options are. I have strong W2 income (and more than 2 years of RE experience), so once we've completed our renovation and met our 6 month seasoning, it's a simple matter to refi w/ a conventional loan at 75% LTV.

@Richard Scholtz thank you as well!

@Kevin Romines thank you for your very descriptive answer!

I am trying to get around the 10 mortgage limitation that most banks have these days. My partner and I are buying distressed multifamily (2 - 4 units) with hard money, rehabbing the properties, putting good tenants in place, and then refinancing (not necessarily cash out refi, though would like the option when it makes sense). We are holding the properties.

So my questions are, is it possible to get a commercial loan, so that the note will be in the name of our LLC (and we don't have to mess around with re-titling the property)? Additionally, does the note need to be non-recourse (no personal guarantee) for the note to not show up on our individual credit reports?

We have reached out to several lenders and are having a hard time getting clarity on this.

Definitely hire an attorney and ensure this is handled properly. The last thing you want is for the whole thing to get hung up on a technicality.

If you don't already have a CPA, you may want to consider hiring one.

Assuming Google maps is showing me the right place, looks like a quiet neighborhood on the NE side of town. Should be safe, but I wouldn't call it up and coming. I assume there's not much in terms of shops, restaurants, etc... in the immediate area. I wouldn't live there, but that's just not my pace. I prefer to be in/around downtown.

The cash flow/yield is not at all similar in the markets you have listed. I am not familiar with Florida, but you're going to find higher cash flow much more readily in Indy and KC than in Dallas or Austin (I invest in both Austin and KC). You'll find much different price points as well. If you're after appreciation, Austin is gangbusters right now. Current projections show us going from 2 million in the MSA to 3 million by 2040. Obviously market cycles with rear their ugly heads, but look at the data for the last 20 years. I prefer a blended approach of cash flow and appreciation, which is why I am in multiple markets.