All Forum Posts by: Paul M.

For financial and available time reasons, I might need to renovate one apartment at time, in a building where the apartments are stacked on top of each other. These would be gut renovations. How feasible is this with the utilities, esp the plumbing?

Plumbing I imagine 3 units on top of each other share one plumbing stack, so it seems like it would be difficult to replace that, but maybe one section at a time can be replaced? Also would have to run water supply lines and electrical, but maybe I can find a chase for those. Ductwork also likely a challenge.

Is this just unrealistic? People do it all the time, right, but are they not running new utilities?

Has anyone's experience in real estate let them to eventually get your contractor's license if you didn't start out as one? If so please comment on your strategy/experience as to how the rehabs are performed, eg do you do your own entirely, do you use a more experienced GC for the more complex stuff and do a portion yourself, etc.

Does anyone think that a shower only is as *advantage* for a rental eg showers stay cleaner than tubs, are less expensive to buy/install/maintain and people with kids would self screen themselves out?

Pardon my ignorance, what is a public adjuster? I assumed each insurance company hired their own adjusters to come out and inspect when properties burned down and such?

I am have two insurance agencies to choose from: one of them puts themself out there as "specializing" in real estate and the other is a general purpose one. I've done business with both of them through companies I work for, but not through my own enterprises.

Question, is real estate insurance complicated enough that getting an agent to specialize in apartments is valuable? My instinct is that specializing in insurance should be enough, that it is not like law where a sub specialty should be necessary. Am I wrong?

I otherwise prefer the general one because it is more local, thus more convenient and better for networking etc.

Thanks

I don't know what the bankers would do regarding the blanket loan strategy, since I don't have experience with that technique.

For the HELOC strategy, I have HELOCable equity equal to 25% of the acquisition/rehab costs.

I think from subsequent internet searching that what I'm referring to may be called a "cross collateralization loan"

I wanted to share what I've seen in my research/experience regarding mortgages and HELOCs.

TDBank-charges the same interest rate for investor properties (1-4 unit) as they do for primary residences. I was really surprised to discover this a couple years ago thought it was a mistake, but I've since refinanced all my mortgages into them. They require 41% DTI (instead of usual 45%) 75%LTV. Only in certain sates (check their website). I understand they don't resell their mortgages, but that was second hand info, I'm not sure how I would tell? They probably don't because this doesn't match FNMA guidelines?

100% LTV HELOC primary residence Key Bank-their website says they offer them. I didn't know anyone was doing these anymore? Anyone done this recently?

90% LTV HELOCS on investment property-TD Bank advertises this (technically 89.9% is advertised)

90% LTV HELOC on primary residence-US Bank advertises this, obviously TD Bank would do this too.

Otherwise, the only banks I've seen offering 90%LTV HELOCs on primary residences are local credit unions in my area (Direct Federal and MIT Credit Union). I might have seen banks I've never heard of offering high LTV HELOCs, but I get nervous there might be something sketchy.

Anyone seen any other such offerings, post housing recession?

I've heard that if you've owned a rental property for awhile banks will use your tax returns instead of using 75% of rents when counting debt to income ratio.

Questions:
1) Will they just use the rents on the return or will they look at actual expenses? Will you be penalized if one year alot of things broke or you made a bunch of small improvements that were not capitalized?

2) Will they make any adjustments for vacancy or will they assume that whatever rents you reported will be what will happen in the future?

3) How many years tax returns are they using? Just the most recent?

I heard local banks will use your equity in existing properties as a down payment for an acquisition by placing a lien on that property. In the past I have taken out a HELOC, used that as the down payment for the next property then paid off the HELOC over time. But those were 1-3 unit buildings and now I want to buy a 5+ unit residential building that might require major rehab. Which method is going to be successful with the bank? They are conceptually the same thing of course, but in practice I would like to know what will work better to smooth the application. I will be asking the banker this but want to survey before I do.

Has anyone used their equity as collateral in an acquisition, but not via a HELOC? Did they still have to put money down and what %? If you paid down your mortgage on the new property would they release the lien on the older property at some point?

I have 25-35% equity on 3 properties, 1 of which is my primary residence.