All Forum Posts by: Rod F.

John,

My experience with the LLC loans is I have to sign a personal guarantee on every loan with LLC. Having a 30% equity of the rehabbed Actual Market value Has been plenty for me. I have been dealing with 5 different banks, some more receptive than others.

I haven't actually used any cash in the down payment loan side of the equation. We buy foreclosures, rehab , and hold for rentals. My equity's after purchase and rehab (rehab was financed also). is between a 30 and 40% equity. Currently we have about 40 properties in 3 different LLC"S. I'm now opening different credit cards in each of those llc's building a credit report for each. I hope to drop personal guarantees in the future.

My suggestion is talk to the lenders , more than one. and ask them what is their requirement's. you might be able to buy multiples with your money.  And you will find a significant difference in interest rates.

I have not went back and borrowed any of our equity's.(Heloc)  It does sound like a way to get more houses bought. So far I haven't needed the extra help to get the loans.

I did get a Heloc on my personal house for a while. to purchase a new home for the family.

both houses are now 30 yr. mortgages. while interest was low.  old house is a rental.

mostly 15 -20 yr. amortization loans, were 9 years into it now.

Hope that helps you in some way.

              "There's always another angle you just have to look deep for it."

                                                 It's the art of the deal!!

.

take the 700 in annual fees and go on a vacation if your looking for a get away. Sounds like someone is trying to unload a problem. Here they have a I think a week seasoning on a time share deal. The tactics are so high pressure. I had a  friend that was trying to practically give there's away to get their name off of the contract. the problem was you can trade yours for some ones across the world. everything sounded good except no one wanted to come to there's.  

Brandon, not knowing local market, craigslist does have a presence there. local papers, etc. a little market research goes a long way.

We have considered building small houses to replace aging mobile homes. We have a mobile home park that with local ordinances we have to really step up on the price of Mobile's if we replace them.    Mobiles are depreciating assets , We have a build design That we have drawn up in the 500 to 600 sq ft range that looks like it would work and be some what easy to repair. I have talked to the mayor , showed him my ideas. he really liked them . I just have not started building them yet I keep finding foreclosure deals  and rehab. buy and hold. Some day I will start a build.

My lease states tenant is responsible for first $100 of any repair. Don't think I have actually ever collected it. but sure cuts down on nit picking.

Brandon

Something I have done to test a market out has been to run adds, offering the rental, list the options and see what kind of response I have had.  When they called I explained it was rented. but I do have another deal in the works. could i call them when I got finalized on the new one?  ( I actually owned nothing at the time and I wanted to test the market.).

Our First rental was this way. my wife (a realtor) and my business partner, both said no one wants to live in that farm town.   I ran the add, put my partners phone number in there, and a week later he had over a hundred calls. He finally agreed to buy the house, we rented it a few years and someone approached us to buy it for 3 times what we paid for it. they own it now.   We now have 10 units in that little farm community.

I have a property in Jacksonville I might wholesale! if your seriously looking for a Deal.  

First time I had to have the two years tax returns, show that I could make the payments should I have to make the payments. . I still take a copy of my finished tax return to the banks as soon as I get it finished. Before they ask.  Transparency.  I also have a job that pays my house bills, I show them that I don't need to take the money out.

 I reinvest, reinvest.

Once you have a couple of years rental experience. things ease up a little. Deals are easier to do. 

Today most everything is in one of the LLC company's This moved it off of my personal debt to income ratio. I still have to sign personal guarantees.

Paperwork,  A current appraisal , or if you use a community bank, they may do a drive by appraisal. we use zillows numbers alot when I present the deal. Rehab list, Taxes are already in there office, we use mostly in house loans, 20 year amortizations, (3 to 5 year renewal).   This can happen quicker. and we have a Back up plan . currently working with 4 different banks.  I was limited when it came to the number of personal loans I could take. 

The LLC's own homes. Numbers look good when we close and rehab we have about

30% to %50 equity. We do what we say. We reinvest toward the retirement goals.

Brian ,

If all else fails, another angle is you lease to LLC. Then LLC does all real estate transactions, with renters. Renters are leasing from LLC and it actually owns nothing. LLC accepts rents does repairs and pays you for the pmt. A little more paperwork. but that's how I did the one I owned before I started buying in LLC'S. Only an attorney could tell you about liabilities.

Maxwell,  your experience would give you some advantage over a novice. One thing I have learned dealing with banks is. "The worst thing they can say is NO!!"  If they do There is another one around the next corner. Have your paperwork in order when you arrive, Your rehab analysis, Your suspected rental income figures. Show them where this can make money.  Be Confident and present your deal! The first one for me was the hardest. 

Colleen,

 I live in the south, was doing an upgrade on my HVAC unit.  Talked to 8 different contractors. Some wanted to just do a swap out. others weren't interested in "bidding anything".  Finally an older gentleman, cam in and asked me what I was wanting. Told him I was looking for energy savings. My unit was old and out of production.  He told me the "bid unit" was not the most efficient the the next upgrade would be more efficient. He did an audit on my house.  his suggestions was to starting on the roof with a ridge vent. "lets the heat out in the summer" (we get very hot in the south during summer).  second to blow cellulose insulation in my attic up to 12 inches. (we blew 14). pre-existing was 6 inches of batting.  third thing was to add 7 more soffit vents, to allow more flow in the attic. fourth was to re-caulk the windows and add storm windows to my single pane windows. fifth was to upgrade the HVAC unit to his suggestion. I told him I was going to close in the carport and make another bedroom. he upgraded it by 1/2 ton. (told me it wouldn't be as efficient until I actually closed it in.)   All the upgrades ran me about $7500. I followed every direction he gave me. the unit was a natural gas fired heat with a electric ac unit.

The results were a immediate 50% reduction in my utility's bills. before was 300 to 350. after was 120 to 150 month. (house is  approximately 2000 sq ft ).  Even the gas company came and swapped out my meter. I finally got the gas company rep to admit to me that's why they changed my meter and valve.  Thought I had done something to it. LOL.  Told him what I had done and he said that explains it.  That house is now one of the rentals. Renters stay an average of 3 to 4 years.

By the way I'm slowly renovating the 3000 sq. ft. two story place I live in now to saving money,  everything's done except the new HVAC unit. current one is butane fired and electric ac  That's happening this fall.  New double hung, double pane  windows was this years project. led lighting, attic insulation blown in, water heater upgrade,   I'm averaging the $200 to 250 range now.  Cant wait to see what  the new energy efficient unit will do.

everything you can do to stop drafts. and insulate will help with the energy bills. 

Rod