The Underdog's Story - I BEGAN investing in '08

[Abram Ylitalo]

Hello all,

This will be my first post to these forums. I'll try to make it as brief, concise, and full of information as possible.

I was in the military from 06-10. I spent three of those years deployed and then deployed again as a contractor when I got out. I found myself in a position of cash. I began trying to find out how my money would work for me, became familiar with David Bach, then Kiosaki, Dolf DeRoos, etc. I fell in love with the idea of Real Estate.

I was 19 when I bought my first home. A 2 Bed 1 Bath condo in Hawaii. 286k. 6% VA Loan. I sent my final closing docs by way of handing it to the crew chief on my first flight to Afghanistan. Dec 28, 2008. Payments to include my RIDICULOUS HOA fees were around 2k/month. Rented just below MoPayments.

Got back from Afghan with a bunch of cash burning a hole in my pocket. Bought my second home. 455k REO. FHA 5.5%. MoPayments were about 3100. 6 Bed 3 bath SF. Shortly following closing I spent every penny I had on a reno while simultaneously making some other very poor business moves. Got out of the military so lost my source of income. Had 70k of materials sitting in my garage with no knowledge of renovation and no money to pay someone to do it. Got my hands dirty learned to do all of it, finished the reno, got the place rented for about 4k/month after carrying the note myself for nearly 9 months. Got behind on both of my mortgages. It was totally rented and I was living in a little shack I built in the garage around October 2010.

Got a job using skills from the military back on the mainland for 90k/year. Took it. Got back. Turns out I'm in foreclosure on both homes and that the bank "won't accept partial payments at this moment in time. full amount due only." What an ignorant boy I was.

Gave them the middle finger and decided to go back to Afghan as a contractor and show them who's wrong. Make 170/year rate over 8 months, caught my loans up entirely and was out of foreclosure. 2 months after I passed my 12 month threshhold for late mortgage payments began the streamline refinance process through Wells Fargo. Closed a month ago.

Current Situation:
Mortgage A Terms (Condo): 286k, 3.5%, 1300PITI, 450 HOA, Rented @ 1750, Comps showing 290kish.
Mortgage B Terms (SF Home):455k, 3.5%, 2025PI, FHA PMI@440, +misc for total of 2750/month PITI. Rented @4050, Comps showing 600kish.
Rent Totals: 5800
PITI Totals: (4050)
HOA Totals: (450)
Managment Fees: (580)
Misc: (150)
Net: 570

Other Considerations Following
Installment Loan: 2300 Balance @ 130/month (16%ish)
Installment Loan: 5400 Balance @ 250/month (16%ish)
Student loans (taken to consolidate and drop interest from revolving debt): 9.5k @ 0/month (6%)
Revolving Credit: 6.2k/19.7k @16.9%
Credit Score: Median Score @700.
Income: Gross @8950. Verifiable @0. After a couple more months actual will be @7750. Unemployment ends. Net will be @2520.
Liquid Funds: 7069

Now finally my questions:
1.) I understand I can get my home officially appraised and my PMI dropped from Mortgage B (FHA @455k). Has anyone done this? Are there any golden rules tricks I should know about? For me this would decrease Insurance Expenses @440/month.

2.) I've been reading about pooling my cash funds into a CD and borrowing against it @2%. This would be an excellent option for me to consolidate my Installment debt which is @16.9%. Can anyone shed the likely hood of that happening in today's Banking Environment?

3.) Does anyone see anything creative I can do to free up cash, decrease expenses (outside of raising rent or managing the property on my own. This is not an option as I'm living in Maryland and my properties are in Hawaii. I've maintained 100% occupancy with my current rental manager for the last 2 years as well. Switching agencies for a discounted management rate is not an option.), or aquire more money based strictly on my assets?

I'm excited to see what this board has to offer!

Thank you all in advance for your time and I look forward to talking to some of you.