All Forum Posts by: Sachin Bhat

So if you have an option to purchase a property to buy and hold with a hard money and you have two option which one would you chose? Options being as follow

First lender charges 3 points and possibly 8% rate

Second lender charges 2 points and 9 % charge

Plan is to refinance after 6 months and pay off the hard money loan.

Second question

I also have a lender who offered a line of credit but they charge 15% up front and 7% variable rate. I have access to the funds for 5 years. I reuse the funds many times as I want. Is this a good deal to get if I want to use the money to do some flips.

Thanks for any input.

@Anton Mattli that’s a great advise. Thank you! I will call the property management again and find out the eviction rate. It’s for sure not in a “war zone” because I called the local police department and asked about that neighborhood. They said they get calls for petty theft and as a owner you can prevent that by managing the property right. Possibly putting some security cameras etc. I have the actual rent roll and currently 19 units are rented and brings $9700. When i spoke with the property manager she said it needs new boiler and new wirings. Roof also needs some attention. But it’s a solid building.

@Tyler Watts Thanks

@Nghi Le Thanks for the post. Yes most banks require minimum 20%. If I find a partner who is willing to put other half then it would be 10% down per person. Just trying to be creative over here. Haha

@Brian Ploszay Thank you for that input. I have the rent roll and currently 19 units are rented and brings in $9700 per month. They said they rented 6 more units since but I don’t have that in the rent roll.

I am looking into buying a 37 unit apartment building. I am buying it from a wholesaler and it is priced low because property is in distress. It is 75% occupied right now and the sale price comes to almost $12k per unit. I reached out to so many lenders and some say they don't finance it in that state and some say they don't finance apartments costs less than $50K per unit in sale price. Property is in a C class neighborhood. I did some research and found that it is Not in a "War Zone". Just low income area. It needs about 60K in repairs. My plan was to buy it with hard money with 10% down and use my own funds to rehab and rent out rest of the unit, stabilize it and then do a cash out refi in to a conventional apartment loan. Although I owned/rehabbed SF properties  this will be my first apartment deal (if I can get it done) and I am kind of hesitant to raise money from private investors because they always ask how many apartment deals have you done in the past. Where do I go from here? Should I just drop this deal and move on to the next deal? Only reason I haven't given up on this deal and asking for help from seasoned investors on BP is because I see great potential in this property. Thanks in advance for any inputs. 

@Casey Rondinella I think we looked at the same 37 unit deal and was doing my initial due diligence. I was really surprised to find how hard it is to find a property management company in Jamestown Ny.

When you are starting out you probably settle for less of cash flow. Because you might not be in a position to pay cash for the property or put a large amount of down payment. That's the only way you will be able to have a large net positive cash flow per month. If you are using hard money lender or even conventional lender but don't put large down payment then you have to settle for lesser cash-flow. Once you accumulate some cash through equity build up then you will be able to purchase property with better cash flow since you can use that equity money to put down on your next investment property. But it will take some time. Its like a snow ball effect. 

@Julia Fair that’s an interesting question. what would you do? I believe in rewarding a good behavior as well

@Chris B. You are doing great! Keep it up. Only issue I see with SF is that you run into issues after refinancing 10 homes with conventional financing. Unless you get a portfolio lender to finance properties if you own more than 10. I believe you already knew that.