All Forum Posts by: Marcus Holloway

I'm completed the rehab on my first planned brrrrr deal. It's a SF I own outright in a 50/50 LLC partnership.

The home was in total disrepair so we had to strip it down to the bones. 

In the current climate, we knew the refi would be difficult but not impossible. One issue that did "pop-up" was that since we purchased the home cash, within the LLC, we have to do a commercial loan vs a residential. I didn't know that.

I was expecting to go to a home lender and basically say "Hey, we have good credit. We rehabbed a home with personal credit; give us money." 

lol, that's clearly not the case. The application process for commercial business loans has been an experience. 

Any advice or insight on navigating commercial REFIs owned in LLCs?

Thanks

@Ketan Pandya

Hi Ketan,

I’m still satisfied with Avail. The interface is user friendly for both me and the tenant. Keep in mind, I only have one tenant, currently.

What I really like:

Digital record keeping (lease, payments, maintenance reqs)

What I don’t like:

I wish there were built in templates to notify tenants for things like inspections, etc.

There is a 3 day processing period for payments.

Otherwise I’m pretty content with avail. Hope this helps!

@Joe Splitrock that's amazing insight! @Bobby Larsen thank you as well for the input. 

All the input is much appreciated. 

@Joe Villeneuve I do! Great analogy.  I was thinking I'd trade some of my cash flow for an early payment in a troubling time. I'd have peace of mind on the rent for the month and the tenant would get a little more money in his pocket. 

I really do appreciate the responses.

@Michael Noto I was thinking of making it a temporary provision while our state is on stay home order. Eventually, normal life will return and I'm still requiring full rent, due on the first of every month. Perhaps assuming he needs help, without him reaching out first is a mistake... I guess I'm just trying to be a human while also trying to run a business. 

Thanks for the response!

By revealing that I'm willing to alter the lease? Please explain. I'm genuinely looking for ideas. thx. 

I currently have a SF home and about 60 days away from completing a total gut rehab within a partnership. 

In this new pandemic reality, I've decided not to reduce rents. I am, however, thinking about giving early payment incentives. Something like, pay before the 1st and get a $100-$150 credit.  

I'm fortunate to have (2) essential jobs that have not shut down,  so I can afford the mortgage even without rent. He's been late a few times in the past 9 mos but has always paid and taken great care of the property.

I'd like some input, please. thx

Congrats on deciding to take the first steps toward RE investing. I'm in my 2nd year of investing so I still feel a little weird giving advice as if I'm some kind of "guru". 

I'll just answer your question from my experience with my first rental. If you go with a big bank or credit union, yes, you'll need a credit score. I was approved for a 203K loan with a 660 score. My broker said I could have been as low as 610, but my APR would've been higher.

If you're going FHA, you'll need to put down at least 3.5% and the bank will finance the remaining 96.5%. If you happen to be in the armed forces, you can qualify for 0% down if you have the credit requirements.

BP is a great tool, but the best first step you can take is contacting a lender and getting pre-approved. Trust me, they'll be more than happy to tell you how exactly they can give you a loan. Good luck. 

My first tenant is a friend. Already regretting it. 

@Matthew Childs

Hey Matthew,

I’m in the 2nd month of the lease and I’m very pleased with Avail’s software.

It took care of a lot of items that I otherwise would have been pulling my hair out about. Lease, checklists, payment reminders and a tenant friendly platform.

My only small complaint was that it took a few days to verify mine and the tenants bank accounts for the 1st month’s rent. The 2nd payment was quick and easy, however.

So far, so good. I’m sold on Avail.

I hope this helps.