All Forum Posts by: Mark S.

Seems like a lot of work for no real benefit

I e-signed late last week (Thurs or Fri) and got my EIDL proceeds lump sum on Tuesday of this week. 

@Charles Osugo, it’s technically a high yield checking, but you can always put more than $10K in there to use the excess as an operating account and the $10K padding as the “savings” component.  Different ways to look at it.  At the end of the day, no one is getting rich off it, but it helps at least some dollars not lose too much to inflation (and arguably potentially slightly beating inflation). 

@CJ M., I asked my lender this before signing the docs and they wanted to know loan amount, terms, monthly payment, etc.  Basically, it sounded like they would look at the loan as any other debt.  They said I would be fine and still be able to qualify for additional mortgages for rentals in the future.   

@Roy Muller, I don’t know and assumed it would be everything owned by my business.  They should have thought that through before extending me a loan.  I’m not going to default, so it won’t really matter, but I’ll leave that up to them to reach out to me. 

@CJ M., same and I was wondering same thing. Haven’t received deposit yet.  Others on here have said lump sum.  We’ll see. 

@CJ M., had call with them.  Lots of unknowns.  I ultimately did decide to take the loan.  Waiting on proceeds.  If SBA becomes PITA, will just pay it back and call it a day.  Plan is to take proceeds, put in separate business account, pay mortgages out of it until depleted, and do everything else as normal.  Will decide later whether or not I pay off in lump sum or make payments.  Depends on how all this shakes out.   

@Charles Osugo, Varo’s website says 2.80% APY up to $10K with $1K direct deposit and 5 debit swipes.  You can get a little higher elsewhere for marginally more work.  

Great Lakes Credit Union in IL has 3.00% up to $10K with a few hoops.  

Consumers Credit Union in IL has between 3.09% and 4.09% APY up to $10K with additional hoops.  

If you want to keep it simple, Varo’s 1.41% APY seems to be slightly higher than Marcus’ 1.30% APY.  Not sure what others like Ally Bank, CIT Bank, and Capital One are paying, but Marcus is usually pretty competitive.  

Big difference between deposit products and investment products.  Depends on your goals, liquidity position and needs, etc. 

Hey @Wade G., I'm probably at an average of $300/house after PITI and PM fees (with 20% down, 30-year fixed) in Memphis. I use 18% of gross rents as reserves (8% vacancy, 5% maintenance, 5% capex). These are turnkey properties. So, after PITI, PM fees, 18% gross rents reserves, I'm probably around $150/door on average. Worst one is about $100/month and best is about $250/month. I'm completely hands-off.

It’s also important to look at total return: cash flow + tax benefit of depreciation + equity growth via principal paydown, potential appreciation (which I assume for me is 0% to be conservative) + inflation hedging benefit via leverage with long-term fixed interest rate debt.  When you look at it this way, it’s hard to beat for something passive.  There are people on here that hate on turnkey and earn higher returns.  That’s great.  I don’t want a second job and turnkey suits me just fine so far.  

Hope this helps.  

@Kevin Knight, did you read your SBA loan documents?  Assuming you’re talking about an EIDL, the money is not to be used in this way.  

@Wayne Brooks, I believe I read that somewhere about the ability to transfer to SMLLC as long as loan was originated after a certain date (within past few years).   Was it Freddie, Fannie, or both?  That’s the part I don’t recall.  

@Paul Ellerbusch, I have my title company quitclaim from my personal name to my SMLLC after closing. If LLC is on the lease, you'll likely want the LLC to own the property as well (even if loan is still in your personal name). That's been my experience anyway.