All Forum Posts by: Sam Yin

As a comparison note, the local lenders here in SoCal I have shopped with run about 3.5%-3.7% for small commercial loans under $2M and as low as 2.7%-3% for the larger deals over $20M.  I generally shop at least 3 lenders and I have found the recent average to be 3.5% for a 5-7 yr commercial, amortized at 30yrs with 1point to broker.  There is no buy down that I have ever heard of with the folks I go through.  Buy downs have generally been with non-commercial loans.

@Chance Love

Awsome! I will save your information. I definitely want to expand into new horizons.

Thank you!

@Justin Gottuso

I live in the Los Angeles area but I invest in any area that the numbers work. I started really local but it did not pan out so well in cash flow, but did have great equity growth for 1031s. I currently have a few SFRs in Ontario, and multi units in Upland. I am concentrating commercial residential in the high desert. I self manage currently but if I do anything over an hour away, it will be PM managed.

I'm exploring Indiana, Arizona, and Florida.

Sounds like you have been crushing it on the acquisitions as well. Great job!!! Best of luck on the BRRRRs, they are a great way for exponential growth. I want to get into that as well, if it presents itself.

@Justin Gottuso

Yes, it is under contract for 1.11M on conventional/1.1M on hard money. As for the calls, there is no charge, it part of the commercial real estate business. I established a good relationship with this agent. We closed on an 8plex a few months ago. I was in escrow on a 10 and 8 plex with him as well where I backed out after the inspection reports. We talk on the phone about 2times a week.

As for down payment on this particular deal, I have savings to cover. However, I'm in a 1031 on an SFR that should close prior so the savings will stay put.

I did not need reserves for this deal or the last 2 that were under contract. I did for thr first 8plex I purchased. I sent in a resume to the lender and based on my current portfolio and experience, they did not require reserves or professional management company.

I work full time at a job for 19yrs. I run a motorcycle business on the side for over 20 yrs. I buy and sell on OfferUp and Ebay occasionally. I also have a part time job teaching motorcycling at the local college, a few days a month. I have 3 young kids. When I came to America, I did not speak English and I failed most of my classes in school for the first 4 years until one day English clicked. Like I said before, if I can do it, anyone can.

As for my goals, it hard to say because it evolves with my knowledge of real estate. I am very new to this investment journey and I am learning daily. My original goal was just to have 5-7 small properties and pay them off quickly so it can support me in retirement and each kid can have one house to live and one to rent. My current goal is to learn more, rinse and repeat, try to build a personal portfolio of 100 units in the next 3 years and 500 units in partnerships in the next 5 years and generate at least 30K/month in cashflow.

I'm not sure it that will ever happen. But I'll keep trucking along. So far, in the last 12 months I acquired acquired 14 units and under contract on this 10unit. As of yesterday evening, I'm negotiating another 10unit using owner owner financing with 15% DP. It was on of the properties I backed out of a few months back. Now I'm asking the seller to drop 50k in price as well.

Don't get me wrong, I am very conscious of work life balance and I make sure my wife gets my personal attention and each kid get daddy time as well as entire family time, whether they want to or not. It's what this whole hustle is for. If at anytime i feel it has cause a negative rift or impact on my family, I would cut it all out. I am willing to throw it all away if it did not work for my wife an kids. I have cut back 80% on the motorcycle business and 80% of the college teaching to focus on real estate. I keep my full time job because it pays well and offer good benefits. My wife works full time and spend all her money on woman stuff and raising chickens and such, but it makes her happy.

To give you perspective, we were camping on the beach the last few weeks and the deals were done on the phone as my kids were boogie boarding. I take the summer off with my kids school schedule and we hit the road.

Hope you picked a few things out of it. From what I have read from others and from the podcasts, there are so many ways to make moves in this game. You just have to pick one, or two, and ask questions. There are no secrets. I learned all this from YouTube.

@Justin Gottuso

Actually, that deal just evolved. After intense friendly negotiations, and the help of the sellers CPA, it is now a conventional loan with the usual 30yr amortized rate. This was finally accomplished by offering a 10k increase to allow time for conventional and see if a septic inspection was needed. I agreed to pay for the septic cert and if it did not pass, we would go back to hard money and 1.1M as originally agreed.

As for how the deal came about, I was conducting a formal inspection on an 8 unit a few blocks away on a property under escrow. I asked the agent I'm working with to cold call the other apartments near by. After about 100 calls, this one came up. An older guy who was a golf course developer. He built this 10plex himself around 1990 and retired about 20 yrs ago and moved into one unit with his mom. Well, his mon passes, his wife passed, his sister passed. He has no kids.

Here's the kicker, he had an appraisal from over 3 years ago for 1.2M and he said it has to be worth that. I ran over to look at the property immediately, it was an A+ condition. But I negotiated anyway, knowing it was worth at least 1.6M at the moment. He was stuck at 1.15M cash as is with no inspection. He had this unrealistic fear it would not pass inspection. After 24 hours, and me frantically searching for financing, securing hard money, I went back to negotiate and got him to agree to 1.1M. He just wanted to cash out and live the rest of his days. But I still pursued conventional financing and we finally settled on this agreement.

The reality is I would still save about 30K on financing and refinancing costs, so the added 10K is way worth it.

Well put. I think that is the big hurdle for some to get over. But you hit the nail right on. It's a matter of leveraging and manipulating credit and debt to acquire the property without having to put much, if any, out of your earned income from W2 or savings.

This seems to be the only way I have figured... so far. May be our collective minds might see more avenues.

Late fees are great but it can be nerve racking as it is a dicey subject in the balance of tenancy.

I think the first thing is to ask whether or not you have enough income elsewhere to cover possible long term vacancies. Also, what is your risk tolerance? Where do you want to see this business grow in the months and years to come? Why have you been so lenient?

Depending on the answers, it may dictate the strategy. I for one have come to be very firm but fair. I understand that life issues may arise and we all need help sometimes. But these days, I follow the lease terms and issue a late notice and late fee after 5 days have past. Sometimes I also issue an eviction right away as well (curable) just to get the ball rolling.

It all depends on your personal business plan but in the rental game, it should strictly be business. Take temporary losses only if it will likely provide greater gains later.

Just my .02

@Craig Borzelliere great to hear that you have visited Cambodia... not many people even know where it is and about the genocide of the 70s and 80s.

I did a cash out refi on my primary and put of 2 SFR rentals. The cash out refis were costly but in the long game, worth it. It cost about 20k on my primary, and a total of about 30k for the rentals. I felt it was the only way at the moment to seize the opportunity to grow since I was stagnant for a decade.

I can go into detail if you want to hear, but the short of it is that 99% of the costs were built into the refi. The new loan payments still left me with some positive cash flow on top of the money to invest. I refied the rentals first to buy two 3plexes. Then I refi the primary house that was 3 yrs into a 15yr loan to buy the 8plex while actually dropping my mortgage by 1000/month going from 15 to 30 yr. Then, after all that, I re-refied to buy the 10plex.

As I'm typing this, I'm starting to get confused myself... it would take detailed explanation to clear it all but I think you get the gist. I still have about 300k in my house to tap into. The rental properties all have between 30% to 50% equity in them, amounting to about another 2M. This is why I still feel comfortable repeating but i know it will end soon.

As for where, I focus in San Bernadino County. I have lived there before and I know the area well. For example, Ontario is a growing area, likely to surpass Los Angeles in near future growth because of the availability of space, an international airport, and the crossroads of major freeway corridors. Take a compass and draw a 30mile radius. Within that circle is the arena. People usually tolerate upto a 30 mile drive to get cheaper housing and stay close to work.

I can go on and on, but I'm very new to this and I'm sure people can pick me apart. I'm learning everyday and I try to listen to bigger pockets podcasts from the past to get tips. I have now officially been in this arena for just over a year and I have enought income to quit my job, but I wont. I need my job to accelerate to 5x in 5 years.

@Craig Borzelliere I'm sure others will chime in, but dont let that equity sit too long. The conditions are ripe at the moment and you should capitalize on it.

@Darius Ogloza Agreed.