All Forum Posts by: Andrew Enness

Thanks @Rick Albert. We're going to shop around for lower rates on the HELOC to see what we can do to reduce the interest rate. We've recently been contributing a portion of our monthly payments to now paying the principle so it's come down a few thousand dollars from the starting 62.5K to 60K balance. We just hate the thought of paying 8% interest if we don't have to be. We'd much rather be saving those dollars to go towards the next property. Appreciate your input.

@Rick Albert Thanks for your response and insight, really appreciate it. At minimum we'll start to look at other options to replace the HELOC through other Credit Unions to see what other rates we may be able to obtain.

Ideally, we would like to grow our portfolio into other properties and do this sooner rather than later. We're putting a lot of sweat equity and updates into the back unit now so that we could potentially rent it out and look at finding another property we could live in and house hack again in the coming years.

@Erik Browning Thanks for your response. Some more details below:

PP = 1.25M

Current Value = Maybe 1.375M? (the asking price in September 21 was 1.4M), Redfin has it at 1.53M?

Loan Terms: 80% First /15% Deposit / 5% HELOC

PITI = $5,657

Current Rent = $5K Per Month.

HELOC = $62,500 at 30 years, variable rate.

In September 2021 my wife and I purchased the Duplex we were renting for the previous five years in Silverlake, Los Angeles. This was our first real estate purchase of any kind. We were living in the back house and the front house had a tenant paying almost market rates at the time of purchase. The tenant moved out early March, we made some minor updates, repainted and were able to have a new tenant in for April 1st with a rent increase to market rate for the new tenants. Both units are freestanding, 2br/2ba. All has been going well with the new tenants and the property, our monthly out of pocket is substantially less than what we were initially paying in rent. 

When purchasing the property, we came up a little short of the required 20% deposit. Our mortgage broker was able to set up a HELOC to bridge the remaining $60K+/- that was required. At the time, the interest rate on the HELOC was 5.5% though now it's at 7.99%. The main mortgage is 30 year fixed at 3.1%.

We had a good relationship with the previous owners, bought under asking and probably under market without the threat of multiple offers from other buyers. The initial plan when we purchased the property in 2021 was to cash out refinance and pay of the HELOC though that opportunity passed us by fairly quickly with the interest rate increases.

Other than making the monthly payments to pay off the HELOC, is there any strategies we should be considering to clear or reduce the cost of the HELOC?

Thanks,

-Andy

@CJ Berina I was able to make it last night through hopefully I can make it once returning from the holidays. Looking forward to meeting you there one evening.

@Larry Fried Thanks for the warm welcome! I like the LA area though it seems challenging to find much under 750K that would also make sense for us to live in, with regards to commuting for my partner etc.

@Bryan Pham Thanks Bryan, appreciate it.

@Ciprian L. Thank you for your input, appreciate your insight and sharing of experience, I will definitely keep that in mind as I make my first decisions.

@George Despotopoulos Thanks for the info on the DTI and Lenders, there is usually always a away...

@Account Closed

@Account Closed Thanks, I'm in the Silverlake area so its pretty easy to make it out to SFV. I aim on making it to some of the local meet up groups in the new year when things get moving again so I will definitely be in touch or probably bump into you at one of those groups.

@James Wise Thank you very much, happy to be here.

Hi @Al James,

Welcome. I'm new to BP too though also from Melbourne (originally Mornington Peninsula area). I have been living in the US for a while now though only now starting to look at investing in real estate here. Not sure if I can be on much help to you just yet but feel free to reach out should you have any questions. 

Hi Bigger Pockets,

I've been lurking here for a couple of months, checking in occasionally to absorb the wealth of information. I felt it time to introduce myself.

I'm an expat Australian  (from Melbourne), having become a permanent US resident in 2009. I've spent the majority of my time living in NYC.

After 7 years in  NYC my partner Sarah and I decided it was time for a change of pace and different lifestyle so we made the decision to drive across the country and ended up in  Los Angeles. We spent nine days driving across the US which was great experience. We travel a little with the US for work though doing it at our own pace and agenda was great.

I'm self employed and my partner is on a W2, we've managed to build decent US credit and have just "ok" incomes. We were both starting from nothing when we moved here, both fresh out of college/university in Australia. Living in NYC was great, though an expensive bubble. I burnt through my savings and had accumulated some CC debt as it took me a while to find work in NYC when first arriving, I eventually got it all paid off 4 years later. 

The drive across the country and the move to Los Angeles has opened our minds a little as to what is out there and the possibility of investing in real estate. We have managed to put away some savings since moving to CA and are now considering our investment options both locally and interstate. I have a little flexibility in time with my self employment so much of the responsibility for moving into real estate initially relies upon me.

Locally, we've been considering the FHA (3.5% down) loan Duplex/Fourplex option and "house hacking" instead of continuing to rent. My concern with this would be the debt to Income ratio it would leave us with given the higher property prices and how this may limit me from doing future deals. The cashflow numbers (subsidize of outgoing rental checks) could be ok.

Interstate we'd be looking at Turnkey and the BRRR strategy as it is commonly referred to here. The BRRRR is much more appealing for me. I was in Memphis in August 2017 and met with a turnkey provider whilst there though I'm still leaning towards the BRRRR strategy. Now its a matter of looking to build a team in a market. I spent some time in SLC, Utah from 2004 to 2006 and like it there though not sure if the numbers will work anymore. I haven't been out there since but wouldn't mind a reason to travel there every so often. A friend who is interested in partnering on a property own's an investment property outright in Las Vegas that he has set up with a Property Manager working well for him though we're not sure the LV numbers will make sense these days. The same friend travels to Utah to see family a couple of times a year so from that perspective, neither of us would mind traveling to UT. I will be looking at cities where I can potentially put together a team or trusted people should we end up going out of state.

I'm continuing the education process for the time being though looking to get some hands on experience in 2018.