All Forum Posts by: Jeff Rabinowitz

@Account Closed, welcome to BP. I read the article in the link. I found it to be poorly written and misleading. The author contrast things that are similar. For instance she states "Often borrowers can obtain a second mortgage easier than a home equity loan if they have bad credit, but the risk is much higher because you are exchanging a lien on your home for the loan." Both a second mortgage and a HELOC require a lien on the home. Why would one lien present any higher risk than the other? There are several similar errors throughout the article.

@Matheo Segovia, welcome to BP. If you search the site you should find many articles and posts that discuss this topic. If you are inexperienced you should not do this yourself. Ask for help from a real estate agent, a local investor, or better yet, hire an appraiser.

I know several private lenders who will lend to business entities without personal guarantees.

@Zachary Miller, welcome to BP. If the credit union is unable to fund this purchase you might be able to find a hard money lender, or perhaps, a private lender who can lend the money to purchase the home and fix the roof. Since you have the funds to fix the roof and, presumably, for a down payment that should help you attract a lender. There will be additional expenses to the bridge loan. There may be points at closing and a higher interest rate than the credit union charges. Also, if you refinance, there will be two sets of closing costs. Determine what the extra costs will be and how soon the credit union would be able to refinance once you fix the roof. If this still seems like a good deal and you have the funds you may be close to purchasing your first home. Congratulations.

@Thomas Hopkins, I manage half of my properties and hired a property manager for the other half. I expect I will transfer more properties to my manager as they become vacant. (I have several long term tenants so, I hope, this will be a slow process.) I do not like showing properties or doing the lease ups. This, and the ability to spend less time on the properties, were the main reasons I hired management.

A feature of management software which could be quite valuable, if it existed, would be a platform that could track the amenities in other homes in my neighborhoods and compared the rent amount in those homes to mine. This could be quite useful in setting rents or deciding if an improvement/upgrade might be profitable or might be a good competitive choice.

Seller financing is still viable but, as Bill, states the potential penalties in D-F are severe and the potential risks to the lender are very difficult to guard against. Lending to owner-occupants is fraught with peril. That said, I came to terms on the sale of one of my rentals just last week (it is pending inspection) on which I am going to carry financing. My buyer is another investor who wishes to add to his portfolio. The deal benefits both of us and D-F will not be an issue because the buyer is not an owner-occupant.

Working for other people is not for everyone. It sounds like you are ready to make a change. The only person holding you back is you.

If you do not have a deal under contract you are wasting the investor's time. If you have an original pitch (this is unlikely as I have seen hundreds) and you catch me in a generous mood I may not block your e-mail the first time you contact me but I will definitely block you the second time. If you happen to send your message out to the big players in your area you may end your career, or make it much harder, before you even get off the ground. Study your market long enough to understand what values are and secure the properties before seeking buyers and you may sell some properties.

There are some who hold properties in LLCs and some who don't. The structure can get very involved if you wish, separate LLCs for each property and another LLC which owns nothing and manages the others, receiving all rents. There are advantages and disadvantages to both routes. If you use LLCs you must take care not to comingle funds between the LLCs and your personal accounts or they can and will be pierced in a lawsuit. Many investors who believe they are protected by LLCs are really not due to errors in the way they have managed the entities.

    You may open as many accounts at as many different banks and credit unions as your funds allow. 

    Credit unions sometimes offer advantages to real estate investors as they are more likely to service the loans they write and, if they do, they will know the local real estate market very well and may be more likely to lend on a property than a regional bank would be. Not all credit unions fund investment properties or service the loans they write and some banks (most likely smaller ones) do. You may have to make a lot of calls to find the lenders who service their own loans but it may be worth your time.