I sold a house earlier this year and entered a 1031 with 102K.
I used that to purchase other homes, since that has been where my head has been...
but perhaps I could have taken that amount and purchased a nice commercial property somewhere.
Now I am buying another condo in MS...I guess what I am saying here is that I have the mindset for non commercial purchasing, instead of obtaining a larger down and waiting for a commercial opportunity.
As a commercial lender, do you ever loan 90 or 95%?
Or, can a buyer put 5 or 10% down if the seller carries the balance?
Do you require a minimum amount from the buyer?
Financing for Apt. can be done at the 90% LTV with some seller carry backs. The best rates are for a lower LTV. With a lower LTV there is non recourse and no pre payment penalties available even for lower lending amounts. You need to consider what the loan for property you are buying needs to accomplish. If you might need to refinance in a yr or two it may not make sense to have a mortgage with a hefty pre pay penalty especially if the place was remodeled and rents raised which should increase the value by quite a bit. A refinance to pull out cash is usually limited to 75% LTV, so if you would be wanting to pull out a large portion of cash it would be very important to have a loan that is not going to kill your profits.
Good Luck,
Robert
[addsig]
what are your thoughts on this one for my first big one-
i have flipped, rehabbed and recently just did a 4 unit rehab
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17 units and 4 storefronts in one building - - near condemed- i believe to be seperate utilites- i can buy for 75k and rehab it - slap new roof, windows and enought to pass section 8 inspection inside - maybe get a little tax abatement and rehab grant money - then fill it up with section 8 and refi- to the point that 50% of the rent roll pay all of the expenses and cash out debt- and goto the next one-
what program can i use to lay this all out for me?
Quote:
On 2007-01-20 18:50, acucu wrote:
what are your thoughts on this one for my first big one-
i have flipped, rehabbed and recently just did a 4 unit rehab
----------------------------------------------
17 units and 4 storefronts in one building - - near condemed- i believe to be seperate utilites- i can buy for 75k and rehab it - slap new roof, windows and enought to pass section 8 inspection inside - maybe get a little tax abatement and rehab grant money - then fill it up with section 8 and refi- to the point that 50% of the rent roll pay all of the expenses and cash out debt- and goto the next one-
what program can i use to lay this all out for me?
What is your goal? 20% return a year? For how many years? Are you trying to buy a fixer-upper and hoping to renovate it, fully rent it out and sell it? By what date? At what price? Is that possible based on the area? Are you buying a property to house your business? How long do you plan to be there? These are all questions you need to have ironed out because they will affect your mortgage. If you are looking shorter-term (for example, to buy something and flip it), then you will want a different type of loan than if you are buying something for your business that you want to turn over to your son or daughter in the future."
If you are looking to just do a quick refinance and pull money out without the lender so much caring about debt service then find a lender who will look at its after market repaid value or get a no debt service loan. I just happen to know a lender who does those type of loans at 80% LTV for apartment buildings.
Then again I would need to know what your clearly define goals where for the property.
Always split aces and eights.
Thank you Lassiter,
I sold a house earlier this year and entered a 1031 with 102K.
I used that to purchase other homes, since that has been where my head has been...
but perhaps I could have taken that amount and purchased a nice commercial property somewhere.
Now I am buying another condo in MS...I guess what I am saying here is that I have the mindset for non commercial purchasing, instead of obtaining a larger down and waiting for a commercial opportunity.
As a commercial lender, do you ever loan 90 or 95%?
Or, can a buyer put 5 or 10% down if the seller carries the balance?
Do you require a minimum amount from the buyer?
Financing for Apt. can be done at the 90% LTV with some seller carry backs. The best rates are for a lower LTV. With a lower LTV there is non recourse and no pre payment penalties available even for lower lending amounts. You need to consider what the loan for property you are buying needs to accomplish. If you might need to refinance in a yr or two it may not make sense to have a mortgage with a hefty pre pay penalty especially if the place was remodeled and rents raised which should increase the value by quite a bit. A refinance to pull out cash is usually limited to 75% LTV, so if you would be wanting to pull out a large portion of cash it would be very important to have a loan that is not going to kill your profits.
Good Luck,
Robert
[addsig]
what are your thoughts on this one for my first big one-
i have flipped, rehabbed and recently just did a 4 unit rehab
----------------------------------------------
17 units and 4 storefronts in one building - - near condemed- i believe to be seperate utilites- i can buy for 75k and rehab it - slap new roof, windows and enought to pass section 8 inspection inside - maybe get a little tax abatement and rehab grant money - then fill it up with section 8 and refi- to the point that 50% of the rent roll pay all of the expenses and cash out debt- and goto the next one-
what program can i use to lay this all out for me?
Quote:
On 2007-01-20 18:50, acucu wrote:
what are your thoughts on this one for my first big one-
i have flipped, rehabbed and recently just did a 4 unit rehab
----------------------------------------------
17 units and 4 storefronts in one building - - near condemed- i believe to be seperate utilites- i can buy for 75k and rehab it - slap new roof, windows and enought to pass section 8 inspection inside - maybe get a little tax abatement and rehab grant money - then fill it up with section 8 and refi- to the point that 50% of the rent roll pay all of the expenses and cash out debt- and goto the next one-
what program can i use to lay this all out for me?
What is your goal? 20% return a year? For how many years? Are you trying to buy a fixer-upper and hoping to renovate it, fully rent it out and sell it? By what date? At what price? Is that possible based on the area? Are you buying a property to house your business? How long do you plan to be there? These are all questions you need to have ironed out because they will affect your mortgage. If you are looking shorter-term (for example, to buy something and flip it), then you will want a different type of loan than if you are buying something for your business that you want to turn over to your son or daughter in the future."
If you are looking to just do a quick refinance and pull money out without the lender so much caring about debt service then find a lender who will look at its after market repaid value or get a no debt service loan. I just happen to know a lender who does those type of loans at 80% LTV for apartment buildings.
Then again I would need to know what your clearly define goals where for the property.