All Forum Posts by: Andrew Postell

@Jeff Moore the main issue is finding a lender that will put a HELOC or Line of Credit on one investment property. Most will not entertain this strategy. Placing a HELOC on your primary house is what most banks will do. I have seen a Line of Credit against several properties (usually with a total equity amount of $1,000,000 or higher) but on a single investment house that is the unicorn that we are all looking for. What most investors will do is only put down the minimum amount they can on a property so they can keep more cash to buy more homes. If you already have purchased this property then a cash out loan might be your best bet. Keep in mind that cash out loans also have an entirely different set of rules for you to be aware of. Hope this helps!

@Theo Z. I am following you on the math but I think it's really a philosophical investing question that you need to address. What I mean is that some investors feel that as long as they cash flow on a property then it doesn't matter what the payment is because someone else is paying it. Others feel that they always want cash in the bank to find more deals. Some people believe that they only pay down their properties with the cash flow of other properties. And some people just get really stressed out when they have debt. Numbers aside, what is important to you? If you said, "Andrew, the numbers ARE what's important to me" then logically you should never have debt. But I think there's a threshold in there for you where a certain amount of debt is reasonable. A private loan has a lot of benefits - it's not on your credit report so it doesn't affect your DTI, it's probably more flexible if something really drastic were to happen to you and you needed some breathing room for a few months. So there are reasons to keep it besides just the rate of interest. Hope this helps some with your decision making.

@Nathaniel Hernandez without seeing your information directly it might be a little difficult to give  you the right guidance but there are portfolio loans that ignore your taxable income entirely.  One specific portfolio loan goes by just the cash flow on the property.  Another type is one where your bank statements are used to create your income - you have to be self-employed to use this type.  You would still need a decent credit score for these loans types (660 or so) but they are good options for many investors.  There are pros and cons to every loan type and if you need more specific information feel free to Private Message me.  Good luck!

@Frank Profeta you are getting lots of good advice here.  A conventional loan will allow a cash out refinance 1 day after purchase if you bought with cash (delayed financing rule).  Now, a bank can add their own "overlay" on top.  So that's why you may hear different stories on this rule.  One bank may allow it after 1 month or 1 year if they want to but the actual rule is 1 day.  If  you did not buy with cash then you would need to wait 6 months after you own it to get a cash out loan - with a conventional loan that is.  Portfolio loans have non-conventional rules so they will differ greatly dependent on the bank itself.  Hope this helps.

@Jay Leisten have you every done a "Delayed Financing" transaction before? Are you trying to get the cash out in the first 6 months of owning the home? If you are looking for a cash out loan with conventional money they have pretty strict rules on how much you can get a loan for during certain time periods. For example, since you purchased with cash you will be limited to receiving your purchase price + closing costs OR 75% of the LTV whichever is the lower amount but that is within the first 6 months of ownership. If you didn't buy with cash you would have zero option with a conventional loan for 6 months. After 6 months then you can use 75% of the After Repair Value. Feel free to Private Message me if you need. We have a branch in Louisville.

@Kay Ferdous I concur with @Chris Mason. Look for a portfolio loan if you need that LTV.

@Brian Hatcher great questions here.  If you want to get that deep into the analysis then I would suggest getting with an investment planner to see the numbers and separately researching the housing side of things to compare.  There are a lot of things to think about when it comes to investing.  Your 401(k) is just one of the choices you have.  I would think that your employer would allow you to invest $50 per month in your 401(k) if you wanted.  To invest in a house at 20% down of $100k means you need $20,000 just to get started.  That's a big difference.  But many of us use investment properties as part of our portfolio.  Some people believe that using their retirement money to buy investment properties is a better choice than leaving it in their 401(k).  But those poeple might be in a completely different level of life than you.  What I mean is if the stock market tanks for you right now you still have 30 years of working to make up for it.  So you can afford to be risky.  Someone who is 65 cannot afford to be risky since they might be done working entirely.  They may have already contributed and received matching funds from their employer for 30 years. So whatever the philosophy is that you want to use just make it an informed decision and it will be the right one for you.

@Mike Warder sorry that this happened.  This is probably the biggest complaint of having an escrow account.  Your lender should adjust the 2017 payments so this doesn't happen again but they will give you two options about it:  Pay the 2016 difference to them now and tell you what your new 2017 payment  with the right property tax rate OR wrap the 2016 difference on top of your 2017 corrected payments. Essentially making your 2017 payment even higher.  A lot of people don't have several thousand dollars just laying around and that's why that 2nd option is even out there.  Remember, your lender already paid those taxes - if they didn't then the county can foreclose on the property kicking you out and erasing their debt...they aren't going to let that happen so they have likely paid the amount already and just need you to decide on how you are going to pay them back.  Also keep in mind that if the county raises taxes again in 2017 they could be short again.  Sorry that this occurred but hopefully you know what to expect in the future.

@Brian Hatcher the very first thing I would tell you to do is to be thankful. You are in a great position sir!  Secondly, make a small savings goal of 3-6 months of bills.  Nearly every financial expert states that this is singularly the most important step to anyone's financial independence.  Having 3-6 months of bills saved up means if something unexpected occurs then you have the plan to handle it.  What you don't want to have happen if something upset the direction you are going in because it sounds like you have a great future.  So plan on the unexpected and you'll have the expected covered.  Third, please take advantage of any matching program that your future employer may offer you.  Meaning if they match your retirement investments then dedicate whatever level they will match.  That way you are already leveraging your $$$ to the best of your ability.  If you can do those 3 steps then you can handle buying a home or two no problem.  Continue to march on and I look forward to seeing you in the Top 30 under 30!

@Jesse Kailahi What @Russell Brazil stated is 100% correct.  I have many customers who do mulitple deals per year.  Buying a car has more impact on your credit than buying a home.  Make as many offers as you like!