All Forum Posts by: Angel R.

The rate wasn't mentioned and whether it is fixed, conventional residential or not, but I'll assume it's a long term fixed rate below 5% that doesn't bother you for your financials every year.

Not even I rush to pay down sweet residential mortgages at 5% or below and I paid off 19 rentals last year.  Which ones did I pay off? Rates over 6% and commercial loans at 5.75%+ with shorter terms, adjustable rates, calls and hassle. And a seller financed house at 6% with an old guy. Didn't want to have legacy/heir risk. The son is in jail again actually.

I understand what you're trying to do more than most, but it's just too easy to beat 4-5% returns about anywhere.  I would wait until I had at least 5 before paying off the 'good' loans.  I waited until 35 before beginning to knock out the bad. Not all were horrible, the prevailing residential rates 15-11 yrs ago were 6.5% and I still had a few.

If you do decide to pay this off (you have $210k lying around?) make sure you have an opportunity fund still. Even while paying mine off I kept reserves and dry powder. Closing on a cash buy next week that's not bankable so he came to me. IRR will be over 20%. Be a shame if I had stuck it all into a 4% mortgage instead...

Oh- the 'tax befits' of carrying a mortgage. Don't let that be a big factor in your decision. Pay $10k in interest, get $3k back. Negative 70% 'return'.

I'd sell the car for a functional beater if not too far upside down. Or stay the course with the loan if it's not too hard on your DTI to get RE mortgages.

What's the car worth, private party sale? 

Hello Nicolas Botia. The one thing that Newbie's don't understand when they see Duplexes as a way to go for a First Time Buyer/Investor is... "the worst thing an Owner can do." =  to Live in the same building as your Tenants. That also means to take in a Roomate in your 2/1 Apartment to lower the costs. As a burned out Landlord with 30 years of renting in S. Tampa, I look forward to just buying a Fixer Upper House to live in for 2 years and be able to sell Tax-free as my Residence. I finally got a a good offer on my 4 Commercial lots off Dale Mabry Hwy and Interbay. I will get back to where I was 11 years ago, before the Crash, with a Profit of $350,000. That will allow me to buy Foreclosure houses under $200,000, Cash, fix them up and do 1031 Exchanges as I find real Deals to buy. You can 1031 those houses until your Profits go over $200,000 and then move into the last one for two years and sell as your Residence. Your an Agent? You need a place to live and you have a JOB. Why complicate your life with "biting off more than you can chew" and putting up with the Tenants? Single Investors don't need to do more than one Deal at a time and make it Tax-free and Tax-deferred. "The Bigger they are, the Harder they fall." We are at a top in the Market. Where do you think it will go from here? 

You've got some pretty cool parents!  A long time mortgage is a great way to go while interest rates remain low but here's the downside:  fees are high.  If the property remains in your parents' name, there are mortgage programs for first time home buyers where the fees are included in the loan or even paid for by the lender.  It's worth making a few calls and shopping rates AND fees.  

And, congrats on joining the ranks of real estate investors.