All Forum Posts by: Mario Morales

I realize I may be stuck with the terms. Is there anything else I should be asking my attorney and agent about the commercial lease? THANK YOU EVERYONE!!!!

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Originally posted by @Evan Polaski:

@Mario Morales, almost every value-add deal is going to be barely breaking even the first several months, and sometimes depending on the scale of the project, first year or two.

With these types of deals, you need to make sure you are either extremely accurate on your model and assumptions, or conservative. Are you sure you are able to bump rents? Can the tenants absorb that or will you essentially be forcing a vacancy? If vacant, how long? (A note: there are not a lot of new businesses opening these days).

But the point being: the vast majority of people on BiggerPockets will say: "Only buy for what's in place". And that is true if you are buying a fully occupied, property at top dollar. If you are buying any type of value add or opportunistic property, you will almost always be paying, at least a bit, for future cash flow opportunities.

Just reading your advice strengthens my thoughts on what I need to do and I certainly feel confident that it will get to where it needs to be. It is an opportunistic property that has a lot of potential. Thanks for your time in and sharing your knowledge, I put an offer and it was accepted!

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Originally posted by @Simcha Davidman:

@Mario Morales there's obviously a lot of info we would need to make a more informed recommendation. But if (1) you really know this market and (2) you can withstand the next 6 months (plus additional time for a cushion) of negative-to-break-even cashflow, then go for it!

One thing to consider is financing. How are you underwriting it so that it will break even - will a bank think there is a high enough DSCR to cover your mortgage until you can bump the income higher?

Thanks for your input. I certainly meet your first recommendations. I made an offer and it was accepted!

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Mix use, commercial space on 1st floor locked in to lease until 2024. 900 a month, sucks a bit. The other two units are under market price. Rents can go 30% per unit. I know that we should look at the present, but this is a buy and hold for me as the location is excellent. Any thoughts or advise, greatly appreciated.

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Is this normal during these times?

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@Russell Brazil examples please!

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@Stephanie P. Thanks!

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I have a 3 unit, primary residence, just refi'd into conventional, good cash flow. I would like to buy a second property, either primary or investment, hoping to find a 5% conventional, and once that is up and running, I would get my 3rd property as an FHA. Or should I go FHA now and then go into a 5% conventional through a small bank? What should I do?

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@Mart B. I bought a MF, and I ahd to invest a bit, but overall, I am happy and do see a future for it, at least East of Kedzie, South of Ogden.

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All Forum Posts by: Mario Morales

Mario Morales has started 82 posts and replied 213 times.

Post: [All You Can Analyze Weekend]

Post: Mix Use Property: FHA loan & How does Insurance work?

Post: Breaking Even first few months but will cash flow within 6 months

Post: Breaking Even first few months but will cash flow within 6 months

Post: Breaking Even first few months but will cash flow within 6 months

Post: Mortgage Lender is Taking A Long Time To Get My Pre Approval

Post: illegal Activities in my neighborhood !!! What can be done?

Post: Help, what kind of loan can I get for my second property?

Post: Help, what kind of loan can I get for my second property?

Post: SFH in North Lawndale of Chicago