All Forum Posts by: Brian S.

Hey BP Fam,

I'm currently in process of a cash-out-refi, and getting a loan quote of 1.2M at 7% rate 5yr/30yr amortized.

I have a call tomorrow to discuss and or move forward with it. The 7% is high, but is accurate given current market,

and I fully expect to "beat" that by far with the investment gains I expect with how I put the cash out to work. Anway, my Question is,

what Questions should I ask on the call? My current notepad list is:

(essentially I just want to make sure they are doing their due diligence to find the best loan product for me etc)

Who is the lender?
How many diff loan products/options did you have on the table?
How much is the appraisal cost?
Also when eta to receive appraised value once they begin?
With the given 1.2M loan value, what estimated value is that based off of
and/or the LTV?
How much equity/cash will I be able to take out?(compared to equity and loan amount)

.

Quote from @Zach Wain:

@Brian S. what is your complex estimated value? Its tough to bet 7% on these larger buildings. Conventional primary home SFR's are 5%, so multi unit investment deals are going to be higher right now

Estimated value based on 5 cap and NOI is ~2.3M
With my current rate of 3.25%, my DSCR is approx 3.8, which is slick, but if
I do refi into this 7% loan (albeit I'll refi again into lower rate in ~2 yrs and/or when rates lower),
my new mortgage payment will double, and DSCR will go to approx 2..

So it seems the analysis/question comes down to: higher monthly payments(lower cash flow) short term,
but possibly far greater gains on how I'll put my cash-out refi $ to work
(expecting 100-200% return with gaming crypto investements).. so in that sense the 7% rate is no biggs.

Your thoughts sir?

Quote from @Justin Winn:

Two things stand out to me in this post. The first being your concern about the 7% rate. If you have run the numbers and what ever amount your new payment will be, if you’re still comfortable with the cash flow then the percentage is irrelevant. 

The second thing is that rates have already started to dip some, however, most economists I listen to think you have 6 months and then rates will start to climb again and that as inflation comes down the FED will work to get rates back down so you could potentially refinance in a couple of years and then your deal gets a little sweeter.

I might recommend a couple of podcasts. On the market, a BP podcast and planet money a NPR podcast.

Best of luck to you.

Hey Justin thank you for your reply!
My cashflow can "handle" the 7% rate, it's just not optimal lol, especially since I currently have a 3.25% rate,
but I think getting the cash out is worth it with the estimated "risk/reward." (which  suppose is the ultimate answer to my question)
With my current 3.25% rate, my DSCR is approx 3.8, which is slick, but now my mortgage payment will double, and DSCR will go to approx 2..

And like you stated, it seems macro economic sentiment will see rates continue to increase, so I suppose I'll do it now for 7%.
And I can refi into a new rate in 2 years or so and/or when rates fall..

Let me know if any of this sounds "out of pocket" as this is my first refi so I'm novice here in that sense.
(and as I said I expect to get great returns on my investment with the $ I pull out in the refi, so the rate % isn't a huge concern)
And thanks for the podcast rec's! I currently enjoy BP and "Jake and Gino" and now I will add the above to my mix.
100+ units by Q4 2025, well on my way! Cheers fam

-Brian

Quote from @Gabriel Hall:

Quote from @Alicia Marks:

Welcome to our question of the week! We are talking about goal setting, because that can apply to any point in your journey as an investor. At BiggerPockets, you may have heard the mention of a BHAG (big, hairy, audacious goal) as something that seems almost unattainable, but still very possible. It has a deadline and objective that is measurable. Some people choose to measure it around a number of units, cashflow, networth, or some other factor. The important point is that it is something that you value as a goal to keep you on track. 

What is you BHAG? Have you made a BHAG in the past? How did you do? What factors helped you decide on your goal?

I want to encourage everyone to connect with other investors that have a similar goal or may be in a similar point in their investor journey. Having someone or several someones to help you be accountable for your goals can be a very important step to getting those goals accomplished.

Let's get talking!

My two current goals are to have a $1,000,000 income yea, and a $10,000,000 net worth total.  I build businesses, real estate, and run a family business I run as a W-2 job.  Is that big?  

Hey Gabriel, I think it's great! Definitely not too big, numbers are just numbers. I also have a 10M net worth goal, but I'm thinking let's aim higher, why not!? 30M sounds about right.. I feel whatever target we set we'll achieve, so  might as well go a little higher.. thinking we just need 120 units or so plus a side business that generates 30k monthly or so, and well on our way!
(p.s. I don't know why I'm phrasing this as "we" but just trying to be more personable?friendly lol)

Hey Fam,

Seeking an OG to give me their "hot take".. like a "holy shii don't do that" and or listen to my thinking and tell me if it sounds reasonable.

A second set of eyes.

So I own a 18 unit bldg, and have a partner at around 25% stake. I/we have owned for 4 yrs now, and as I've gradually increased rents and thus NOI, the property value has increased significantly (also compressed cap rates where i'm at), and my partner is seeking a buyout, which I'm game for.

Applying for a refi, and just now got the proposed terms: 1.2M Loan at 7% for 5yr term/30yr amortized.. sheesh..

My thoughts: I really want to get liquidity/equity out, which in this case I can get out a good 350k at least, as there's "blood in the streets" across many investing asset classes, and I believe I can get amazing entries/returns over the next 24 months, and definitely/easily "beat" the 7% cost of money here for this loan, BUT 7%, dang, that's highest loan I've ever signed for by far..

Anywho, not seeking an "answer" but more or less some thoughts, a "what would you do?"

I'm basically gonna do it as I'm confident to get at least a 2x, and maybe 3-5x, in crypto investment in next 24 months..

(I think waiting for rates to come down could long time)

I definitely do not! This is my own personal philosophy, though, and extends to all areas of life.

If I make some grandiose Big "Hairy" goal, it's going to automatically give it intention/significance of being

very lengthy, difficult, and or distant.

I instead gamify my "big goals" and make them light fun and easy! This has allowed me to achieve all of my goals to date, and I'm only getting started.

I'd love to be featured on a Podcast episode someday! Currently own a 12 unit and looking to get to 40 before 2024.

If you own a 22 unit with a property manager team taking care of the property, does that count as an employee, or only if they are identified as such for tax purposes? 

I am capable of filing, just unsure whether Schedule E or C is required for my personal return if already filing K1 for my group's LLC.

Anyone who may know, it is greatly appreciated!

It is a 2 member LLC.

Thoughts?

Hi All, I have an LLC and recently completed my K1 return for my LLC. My question is, for my personal tax return, do I need to complete the Schedule E and/or Schedule C? Or is this not required for my personal return, and I can just file my regular W2 info (this is all I did, as it's my first year having my multifamily REI LLC and was not certain) ?

If anyone is experienced here I'd appreciate the advice! Thank you