All Forum Posts by: Mike Adams

Thanks. Did you have anything of value or substance to add that might help the OP?

I transitioned from buying in the LLC to buying personally to get better financing. Although your lender can say they would not exercise the due-on-sale clause, without something in writing, that's meaningless. The reason I am choosing to hold title personally (with a large umbrella insurance policy) and not transfer over is because, looking through the bank's eyes, if interest rates go up significantly, I would want to force all those paying super low interest rates into higher interest loans.

If you are paying 3%, but in 5 years the going rate is 7%, they could call the note due and you'd be stuck having to refi into a 7% loan (or if you chose to keep holding in the LLC, you'd need to do a commercial loan, which means higher rates and/or shorter terms).

I know "everybody does it," but I just feel better keeping it personally. I have 7 loans with the same lender. Transferring them to the LLC and getting them called would reek havoc for me.

@Mike Adams

Just have part of the sale, the the units need to be empty before you close. Screen and find your own tenants. Month to month lease don't have to be renewed.

@Mike Adams most investors think they're helping themselves by locking in a tenant for life at particular rate and not increasing the rents.  Here's the perfect scenario which shows how they shoot themselves in the foot by doing so. And yet they still want market value for a property that doesn't come close to producing market value rents.   If you can't get a loan on it, you're left to cash buyers only and they usually want a discount.

Mike,

Where's the property? Some DSCR lenders can go down to .85. There's generally a hit to the rate, but it can be done.

Stephanie