All Forum Posts by: Mark H. Porter

I’ve never had the terms of my mortgage stated in an offer.  It’s always contingent on appraisal and financing, but it’s none of their business how much money I have.

I completely agree with Brandon on this one as that is how I started.  You max at a four unit for house hacking per the rules.  The thought being that you get an four unit, live in one for a year, and move on.

You have a lot of money and as I don’t know what a four unit would cost you I don’t know how much of your $200M will be needed but I think you’ll only need 5% down.  This means a 4-Plex owner-occupied costing $600M will require you to put $30M down.  Live there for a year and do it again.  All that time having any cash that may be needed for repairs amd such.

My only advice from here is never, ever, choose an apartment building based on what you would live in. Your savings shows you will have a HOA's far beyond what the normal renter desires. Good luck.

I am not a real estate agent so I’ll let someone else talk to that side.  What I do know is that commercial buys are FAR more complicated.  Ratios, cost per sf, equipment, who maintains what, market movements, zoning compliance, environmental impacts ... 

Yep, skip the LLC and just get an umbrella policy for a few hundred bucks a year. LLC will not only hit you in the financing but also the refinancing.

I live in VT and own rentals both here and in SC. I found the key, in my case, is to find a local realtor who know what they hell they’re talking about.  You’re not seeking to buy a property, your looking to have a relationship that lasts years.

Example, my realtor in North Myrtle Beach would go out and walk properties taking pictures and text them to me with his honest opinion (e.g needs updating, too small a pool). He then got hold of HVAC and other contractors, including the PM, and introduced me to them.

I'm using a different realtor now that I'm buying commercial in SC and NC. This person has an amazing knowledge of the markets and is working directly with my commercial loan officer (and lawyer) to target areas and assets that appeal to the bank from a risk standpoint. This guy hustles, is a multi-generational realtor, and doesn't hesitate to get me to remove my biases. As the properties I'm looking at are NNN I'm not so concerned about local contractors.

ahhh...you had me thinking the sec 121 was going away.  Nice of you to give an old bald guy a heart attack!

I just did a cash-out refi on two buildings - 75% LTV, $500 in fees, 3.2%, but I'm sure many areas are different.

If you walk away with $500M, half of it tax-free and the other in a 1031, the 1031 money ($250M) will give you a million in buying power at least.  With interest rates below 3.5%, you should absolutely use this leverage.  If you can get a 10% ROE (nothing fantastic) and pay 3.5% for that equity why not?  My goal with a 1031, and knock on wood this has happened through all of my seven 1031's I've done, is to double my pre-tax cash flow.

Or, just cash out enough to put a down payment on your house and rent both sides of the existing property.  Depending on your goals, your going to leave a $500M sum sitting there doing nothing.

You know what I would do, but it may not fit your strategy.

Michael, what do you mean the window is closing soon?   first I’m hearing of that.

There's a few phases - 

For info for buying, you'll need Leases and terms, breakdown of costs (what is tenants responsibilities and what is landlords), breakdown of CAM (Common Area Maintenance), each units price per square foot, tenants revenue to rent ratio

Once you go into due diligence, you'll need balance sheets, surveys, P&L, and tenants' sales reports for two years. lease docs and amendments including any statement regarding oral agreements, tenant estoppel agreeing with what you've been given, any open permits or zoning issues, environmental reports (don't want to find out later an old gas station or laundromat was there before), owners current budget, a complete list of all property stating who owns what and who is responsible for the care.

@Ryan Wessel yeah, you are that big.  I apologize for my rant as it wasn’t really applicable.  My disclaimer is that I’ve always done the MF as a part-time gig since I work for a defense contractor iN DC.

Beat of luck in the 50-unit purchase!

I’ll be the wise guy - pay someone else.  

My property manager charges me 6%, she collects all the physical checks and cash and schedules maintenance.  

My bookkeeper does like you do - auto downloads bank and credit card transactions.  They also invoice each tenant individually on the 25th and I pay .50 for each electronic payment.

I pay the bills and use ReceiptBank to take photos of invoices and send them to the bookkeeper.

I really don’t know a Property management software that will do this without costing much, much more.