All Forum Posts by: Aaron Frances

@Warren Rubin following

Do you include Maintenance, Vacancy, Cap Ex, Management Fee's in your Cap Rate figures? I've already figured for PITI (Principle, Interest, Taxes, Insurance) but wasn't sure if the above should be counted.

@Cassi Justiz, Hi Cassi, thank you for your reply everyone! Its nice to see the different view points of others who are in the industry. I caught the bug watching Brandon Turner and other investors talking about leverage and it made me want to jump the gun and speed up my debt pay off. The advice on the tax implications and the importance of meeting with a CPA are highly appreciated. I have a meeting with one in a few week and will see where that goes. In the mean time i'll keep looking at other areas to possibly cut expenses even more so I can continue working on a pay down the old fashion way. I'll be sure to keep you all posted on where I land as I trust many newbie investor find them selves in this scenario their first time around. Thanks again everyone. 

Stessa only support IOS so far. They claim to have Android support later this year. What a bummer. 

@Harjeet Bhatti Hi and thank you for your reply. My mortgage holder does not allow Heloc's, only refinances. Is there another way to do a Heloc if i'm going through another lender? I'm not familiar with that process. 

Hi Everyone,

I converted my 2-flat apartment building into a legal 3-flat using a cashout.

Appraised at $425k, new mortgage at $2330 at 4.35% currently owe $305K now.

Property may conservatively appraise at $525k according to realtor I may have gained $100K with adding a 3rd apartment to my property. Comps seem to be selling higher in my area.

Current FHA quotes a 2nd cashout loan at 3.375% with $11k in closing fees with 7k of it being FHA fee. Mortgage would go up from $2330 PITI to $2839 PITI at$420k 30 year loan.

Conventional came back at 5.9% which would make my mortgage $3100-3200 a month PITI.

I under budgeted for the rehab and am now left with $100k in loans and credit debt at an average rate of 13.35%. We live in one of the units so we are saving $1700 a month not paying rent elsewhere and are still receiving $500 dollars in cashflow after receiving rent from the other two tenants. It kills me to pay out $2350 a month in credit cards with interest when i'm sitting on a possible equity of $200k+. We plan on taking out $99K cash out to pay $65K in credit cards so my wife's DTI can look good when we go for our 2nd property. The $34k in installment loans would remain under me as I'm the mortgage holder of this house at a avg rate of 9%. We'll use the remaining $34k from cash out as down payment for another 3-4 unit property possibly using FHA. I'm just curious if we are approaching this the right way. I'm inheriting a bigger mortgage that the tenants will cover when I move out just so I can have piece of mind that we don't have our money being wasted in finance fees. I feel like the finance fee's are canceling our current cashflow and the payoff calculator we are using for the Credit debt reads 7 years if we keep using our avalanche paydown method to the tune of 43k in interest paid over 7 years. I just want to be free and clear so when we move to the next property we can concentrate on the cashflow business side vs the juggling of the credit card payments. Thanks in advance everyone.

Thanks for sharing @Nathan Williams, that's a great idea.

We actually intend on doing that with the left over $35k i'll be stuck with. Chase and Bofa offer those all the time to us which will help once we pay off those two cards. For the time being my wife and I are tapped and don't want to add to the mess until we clear out the clutter. 

@Ibn Abney 

@Ian Kibbe

Did your projects ever take off? I'd love to hear how they went if they did. 

Hi Everyone, 

I converted my 2-flat apartment building into a legal 3-flat using a cashout. 

Appraised at $425k, new mortgage at $2330 at 4.35% currently owe $305K now. 

Property may conservatively appraise at $525k according to realtor I may have gained $100K with adding a 3rd apartment to my property. Comps seem to be selling higher in my area. 

Current FHA quotes a 2nd cashout loan at 3.375% with $11k in closing fees with 7k of it being FHA fee. Mortgage would go up from $2330 PITI to $2839 PITI.

Conventional came back at 5.9% which would make my mortgage $3100-3200 a month PITI. 

I under budgeted for the rehab and am now left with $100k in loans and credit debt at an average rate of 13.35%. We live in one of the units so we are saving $1700 a month not paying rent elsewhere and are still receiving $500 dollars in cashflow from the other two renters. It kills me to pay out $2350 a month in credit cards with interest when i'm sitting on a possible equity of $200k+. We plan on taking out $99K cash out to pay $65K in credit cards so my wife's credit can look good when we go for our 2nd property. The $34k in credit debt would remain under me as I'm the mortgage holder of this house.  One is a Home depot installment loan and one prosper installment loan at 7.99 and 10.04% rate respectively. We'll use the remaining 34k from cash out as down payment for another 3-4 unit property possible using FHA as we don't have 20% down. I'm just curious if we are approaching this the right way. I'm inheriting a bigger mortgage that the tenants will cover just so I can have piece of mind that we don't have our money being wasted in finance fees. I feel like the finance fee's are canceling our current cashflow and the payoff calculator we are using for the Credit debt reads 7 years if we keep using our avalanche snowball method to the tune of 43k in interest paid over 7 years. I just want to be free and clear so when we move to the next property we can concentrate on the cashflow business side vs the juggling of the credit card payments. Thanks in advance everyone. 

I did just this in my two flat, it cost me around $150k to rezone, dig down, upgrade everything plus fee after fee after fee and materials after materials. I regret not hiring a GC as I acted as my own. I feel like a GC would have been able to get me better deals with contractors while taking away the headache of not having to babysit contractors through this 1.5 year ordeal. Hey @Jeff Burdick. I"m finally done buddy. Lets catch up soon. @Brie Schmidt I came on to pick your brain. This is my first and last GC job and I'm stuck on one thing. Occupancy permit. I converted my RS3 zoning to a RT3.5 and converted my basement duplex into a separte legal apartment. i went from 2 legal units to 3. I've gotten all my final inspections requested however my realtor said I may need an occupancy permit. Know anything about that?