All Forum Posts by: Anthony McEvoy

@Amber Rhea: Only you can truly answer a portion of this... what is "over-leveraged" to you?  At what point can you no longer sleep?  Do you have other sources of income?  Obviously, you don't need to answer these questions out loud...

If you want to build your portfolio, then it does not make sense to pay off the loan on your existing property unless you can get the money back out for another property at a lower rate.  I am not necessarily saying you have to use all of your gains from the primary residence for a new property.  Perhaps, keep a portion in the bank for a "rainy day" and invest the rest.  The rainy day could even be put in an index fund (or something of the like) so it is still working for you.

@Elenis Camargo:  I would actually talk to a mortgage person to find the best option.  There may be other products out there or a different way to structure the deal since it appears you two are in completely different situations.  Also, I assume your brother has laid out a plan to get him out of credit card debt? 

@Ryan Ellis & @Account Closed: I was thinking the same thing but did not want my post to get too long... with your network of people in the area, see if someone else would be willing to take it over (either sell the note for them to collect or evict and occupy).  Heck, even if you sell out at $8k or $10k... the headache is gone.  The beauty is you inherited it so you aren't worried about offloading it for equal to or more than what you still owe on it.

@Ryan Ellis: If it is in writing, then follow the terms and conditions that were agreed upon.  What is the complete role of the bank?  Will they help with foreclosing or are they strictly just managing the money?  Check with your attorney on how to proceed.

In my mind... and perhaps the borrow may be thinking the same thing... if you're in Ohio and they are in Alaska... how much money are you going to spend to make the situation right when the outstanding balance is at $12k?  One round trip flight is at least $600 (not sure where in Alaska the property is), legal fees, your time, etc.  Only you could really answer that question.

@Francis Mendo - The mortgagee is the lender... I am sure they have involvement.

It is not about who actually makes the payment... but who the agreement is between.

Similar scenario... My wife had a car loan in her name when we were dating but I made the payment.  If I did not pay the loan, then her credit would have taken a hit and the repossession process would have been between the bank and her.  Again, the agreement was between the bank and her... not me.

If the land owner wants to receive the tax deduction, then they should refinance the outstanding balance and have the loan in their name.

@Chris Ayers Awesome! Thank you for posting!!!

Go @Mindy Jensen

@Emily Lassen BRRRR: Buy, Rehab, Rent, Refinance, Repeat. Search this sight and tons of information will appear.

Back to your situation... I was thinking you could get the best of both worlds if you bought with a big enough of a down payment, maybe a little bit of rehab/maybe not, then pull a portion of your down payment back out through refinance or a HELOC for purchasing the dental practice.

However, if the practice would triple your income (Of course, assuming tripling your income doesn't mean $100 to $300.), then I would get the practice going and use the income to start real estate investing.  I suggest having the practice provide you a paycheck so you can have proof of income, if you aren't already doing this.

There's nothing wrong with getting a 7% return... probably through some sort of index fund/mutual fund combination... and then taking that money in a year or a couple years and starting the real estate journey then.  All along getting acclimated with the dental practice... listen to podcasts, read real estate books (again search this site to see book recommendations), and read these forums to learn from other people.  Read The Book on Investing in Real Estate with No (and Low) Money Down by @Brandon Turner to get ideas.

I hope this helps you get ideas and plan your journey!  I am interested what you end up doing... keep me posted!

@Emily Lassen - will it cash flow after you purchase it with the business loan right away?  (Obviously, that's personal and you don't need to answer that...)  If so, would it cash flow enough where in a year you can start your real estate journey?

Also, if you have good enough credit scores, you might be able to put down a decent down payment on a house, then pull out a loan against said house and use it for a down payment for the dental practice. Something along the lines of the BRRR strategy. Keep in mind, depending on the loan amount of the practice and what they could liquidate the assets of the practice for, they may ask for additional collateral in the event you default on the dental practice loan. Just a thought...

@Barbara Cloyd - When does their lease end and do you anticipate they will be staying?

If they are going to be staying... I would consult an attorney.  What if the smell lingers for days?  Can they back out of the lease and win?

At the very least, I would provide accommodations.  Pay for a hotel room and provide a meal allowance that is appropriate for the area.  Let's be real... they are doing you a favor to leave while you do renovations.  If there was a second bathroom, then it would be a different situation.

@Darrell D. -  That's interesting... Do you know if they were true Zillow employees or contracted out?