All Forum Posts by: Marlon Long

@Ashish Acharya Thanks, that makes sense

Ok, So here is the scenario. I recently completed a BRRRR and used another person to help fund the project. I gave them 15% on their money for 3 months. Now that I have refinanced the property, I will be paying them back with the proceeds from the Refi. Do they have to pay taxes on that interest since its being paid with debt (mortgage)?

@Victor Mondragon this BRRR is in a working class neighborhood, and we updated the key rooms, (kitchen, bathrooms) Updated lighting and flooring. it was actually a really quick flip. its the second one we have done in this area. We took nice bright pictures and listed it as potential Rent-to-own. I think that helped alot. I have relationships with mortgage brokers and will set up my potential tenant with a broker to evaluate their financial situation to get them ready to purchase in 2-3 years.

@David S. Thats a great point.  the internet provides the anonymity at no cost to them. Showing is saturday and quite a few people i expect to show. but the proof will be in the applications received. (with application fee attached).

Thanks @Thomas S.  I may have to do that.

Thanks for the advice @Andrew Syrios

Houston we have a problem. We recently listed a property that we rehabbed as a BRRRR deal. I listed just yesterday afternoon and have received atleast 20 contacts regarding seeing the property. I researched the area well and listed the property for a good market rent, but now I'm thinking I should have listed it for more. If I have multiple people vying for this property, is it legal to increase the asking price for the rent the same way you would do with a sale?

Thanks for the responses in advance.

@Jordan Yada putting the HELOC in 1st lien position essentially pays off the mortgage. and you are left with just the HELOC, thus the term "replace your mortgage". the tricky part is finding a financial institution that will do it.

@Brent Coombs I used the nice HELOC calculator that one of the previous posts mentioned before and ran a bunch of scenarios varying the interest rate on the HELOC and increasing it year over year to kind of stress test the model. What I found was that I could almost TRIPLE my current fixed interest rate on my mortgage, and increase that interest rate at 0.5% more each year, every year and I would still pay the same amount of interest over the life of the loan as my 30-year fixed at 3.75%. and even in that scenario, I am still paying my mortgage off in 126 months as opposed to 360.

The key to this strategy is recognizing that your personal cash-flow is a tool that can be utilized to aggressively decrease your principle balance on a daily basis and avoiding that interest.  Yes your interest rate will be higher, but your balance is also a factor in the payment equation. 350K at 3.75% vs 100K at 14% is roughly the same interest payment.

 It took me some time to put it all together before I had that Ah Ha moment, but the math works. and yes, there is a requirement for the owner to be disciplined with their finances. But I imagine anyone that is focused on paying their mortgage down faster is already on the right track as far as personal finance.

Your point of the marketing towards individuals that want to pay off their mortgage, but then incur more debt for investment properties is understandable. But I can see how that is a natural transition. If you are executing on this strategy and can see first hand how CASH FLOW is a very powerful tool with debt, then it makes sense that people would start to look at rental properties in the same way, because they are all about CASH FLOW.

I will definitely be pursuing this HELOC strategy for my rentals and primary residence.

Hey BP Community, I was wondering who all out there has had experience with converting your rental property into a group home or sober house for ex-substance abuse clients.  I see this as a great way to add value to people's lives and create more income at the same time.  I am a product of parents that dealt with substance abuse so I know first hand the need and have a passion to help people in this area.

What are some of the challenges that you have dealt with, what are some of the most common mistakes? Overall what has been your experience in this niche of real estate investing?

Best regards,

Marlon Long

Awesome job, I am at the beginning stages of a BRRRR Deal now in Coatesville, PA that potentially can turn into two deals as the owner also owns the property on the other end of a 4 row home block and already stated that if closing goes well, he would consider selling the other unit. when i saw this post I was like, wow, this is exactly what we are planning to do. In our case, our number show that we will be able to cash out refi completely and leave ourselves with an infinite ROI. I would be intersted to know where in PA you rehabbed these two properties?