All Forum Posts by: Nghi Le

Thanks for all the awesome stuff you're posting on this thread, @Chris Mason.

I'm wondering what your take on this article is?  Most people say that the housing and mortgage industry are in much better shape now and that we won't have another repeat of 2008, but this says otherwise and seems to back it up well.

This COVID SBA Loan tracker will answer most of your questions regarding types of entity, timeline, etc.  Looks like a few EIDL loans have already been issued (and a lot more PPP loans).

https://www.covidloantracker.c...

Just saw this article that confirms SBA is capping the EIDL loans at $15k:
https://www.nytimes.com/2020/04/09/business/smallbusiness/small-business-disaster-loans-coronavirus.html

OP had mentioned it before, but I usually like to hear it from multiple people before I believe in something, and I hadn't heard that from anyone else until now.

@Andrey Y. I saw your posts on the SBA Disaster Loan thread a couple days ago.  Sounds like you're having problems paying for your BAM? :-)

And therein lies the problem with what you're suggesting.  Obviously the best way to get rich in real estate is through appreciation long-term, but you have to be able to survive the downturns.  And it's hard to do that if you don't have strong, stable positive cashflows.  Unless you're telling people to rely on their high income job to make payments on these BAM, which also isn't reliable during a downtown.

Have you been through a large recession yet?  I think I saw one of your posts on another thread that you've been investing for around 8 years?  I firmly believe that those who haven't been through a full real estate cycle are still newbies (including myself).  You may have learned real estate through some big guys who made it through a crash, but there are more investors that didn't make it than those who did, and there are perhaps better learning opportunities from them.

Moderators, can you let us know why David's account was closed? Curious if he was providing false information and if I should be ignoring this entire conversation thread.

@David H. I've read all 21 pages of this thread and several other articles, webinars, etc about the SBA loans. What I'm unclear of is whether a fix-n-flipper (or BRRRR landlord investor since they also pay large amount to contractors) can benefit from the PPP or EIDL loan? Obviously the EIDL is less attractive now based on your latest post, but what about the PPP? I know if you have both employees and 1099 contractors, then you can't count the 1099 towards your payroll numbers. But what if you only had 1099 contractors and no employees?

Learn how COVID 19 has affected the real estate industry across rentals, flips and different types of lending in our local market.

Hear from our expert panelists Albert Bui, Charles McKinney, Preston Walls, Zack Lazo on the current and future health of our industry. Attendants will also have the opportunity to participate in a Q&A session with the panelists.

Please RSVP directly on our Meetup event:  https://www.meetup.com/RealEstateAtWork/events/269716949/

Albert Bui has been an active real estate investor and mortgage lender since 2013, with a heavy focus on cash flow. He specializes in mortgage and financial planning for real estate investors and is a regular contributor in local communities (i.e. WAREI) and BiggerPockets.

Charles McKinney is the CEO and co-founder of Certain Lending. Charles has a real estate portfolio of single family rentals and large apartments in Washington, Texas, Arizona, and North Carolina. In his past life as an executive director at Freddie Mac, Charles led efforts to resolve the company's $1.6T non-performing loan portfolio, $30B of which was sold to fix-and-flip and buy-and-hold investors.

Preston Walls is the founder/CEO of Walls Property Group & Walls Property Management. He currently manages a portfolio of 75+ buildings, valued over $300MM. He is currently building a 61 unit mid-rise multi-family project, in permit for a 59-unit site and renovating several existing value-add properties in Seattle.  
Preston has managed syndication projects requiring additional equity capital, raising capital, negotiating terms and partnership agreements, partitioning risk, and managing equity and debt offerings to investors. He has also served as the project manager for dozens of building renovations.

Zack Lazo is an active Real Estate Investor, and President & Designated Broker of Caliber Real Estate. Beyond personally purchasing and selling over 200 properties, Zack has helped investors purchase over $250 million in real estate acquisitions during his 12 years in the business. He also served as a key acquisitions member for the nation’s largest real estate hedge fund, employing a buy-and-hold strategy that purchased over 2,500 properties. His knowledge and experience has him consistently in the Top 1% of real estate agents in Washington, and sought after for advice and training on a variety of Real Estate Investment topics.

For those still buying value-add deals (either flips or BRRRRs), I implore you to begin with the end in mind, more so now than ever. If your strategy depends on future values and future rents (or even current values and current rents), or if it depends on you being able to get another loan to refinance, you need to have an alternate exit strategy. Nobody knows what an ARV looks like in 3-6 months, and with conventional loans tightening and unemployment rising, your buyer pool is going to shrink.

Just be careful out there. Opportunities will be coming, but you have to weather the storm first. Keep your reserves high. I want to make sure my real estate friends are still my real estate friends in a year :-)

I've borrowed from a couple dozen HMLs and talked to over a hundred hard money / commercial lenders. I'd say find another lender for the refinance. Not too difficult to rate-term up to 80% LTV (not LTC) or cash-out up to 75% LTV (with little to no seasoning) these days without paying insane rates. Feel free to reach out to me if you want recommendations.

Another route would be a conventional lender, if the investor is able to qualify. If it's just rate-term, there's no restriction on using current value as opposed to cost.

They do exist. I just refinanced one of my lease options in the Seattle area with a national lender. It's owned by my LLC, closed in about 2-3 weeks, and based solely on the cashflow it's bringing in (1.1 DSCR). Fully fixed and amortized for 30 years, ~5% interest rate, but comes with a 3-yr prepayment penalty. The nice thing is that they took consideration of my leased rent, which was 2x higher than market rent. Most lenders I've talked to simply take the lower of actual vs market rents.

I'll PM you the contact so you can add to your comparison. Please also share your research with us once you've compiled all the data!