All Forum Posts by: Aaron Matassa

I was looking at doing the same thing. But from what I came up with, a cash-out refi has a few grand in costs. Where I haven't found a HELOC having as high of costs. I've been thinking of doing a Home Equity Loan as opposed to a line of credit as I think I will only take out one lump sum. But i'm open to other arguments.

subbing. This is what I plan to do as well (though not with as much equity). So far i'm hooked on doing it. But would still like to hear others.
Thanks

Thanks. Here's the info you asked about. It is a 100k mortgage. I bought it as a foreclosure. My neighbor just appraised for 146k and my realtor estimated about 130-135k based on comps. Zilliow (I know) has it at 175k. I scored a pretty good deal. Paid lower than everyone in the neighborhood.

I think your right about scoping the deals. I have done so briefly. But not enough. I am making up some numbers.

As for the adding to my primary mortgage. I forgot to mention it, but yes, I could pay for my increased mortgage as well as T&I on the rental with a 100% vacancy. I wouldn't want to. But if need be I can make it work. Thats a great point.

I love your $75 over my $200. Here's how I got to my numbers. I paid 100k on a FHA. Got a lot of closing covered. I owe 97k @ 3.75%. Paying 745/mo including an HOA/taxes escrow and pmi. I estimated that I increase my mortgage to 112k if I appraise for 140k. = 15k cash. So a 112k loan at 5% interest is 747.mo. So after HOA (360/yr) lets say 777/mo. So wow. I think i did a little of that math wrong so i'll estimate a $50/moth increase. I guess i got carried away with over-estimating. Thanks!

What I did forget to factor is the refi costs. So 15-4 gives me 11k. Sounds like I need to save up 4-6k in cash for this before proceeding.

I do plan on managing myself. And thank you for clearing up the 50% rule. I plan on some time before the refi. By the time I planned do it, I would have owned the house around a year. I also plan on spending some money on this house to get refi-ready. paint, ect.

So i think my homework is to look up houses, single and multi family, to see what current prices really are. And it looks like i'll be using the refi $$ to put on a down payment rather than paying cash. I'm thinking to try to steer more towards multi-famiy?

Thanks

So far all I can say is WOW. I've been browsing this site for the past couple days and learned so much. Like the 50% rule! Thanks all. Now I have a question of what you guys think about one of my 2 paths.

I am currently not sitting on much cash and working on freeing up some cash flow. I own my primary residence recently bought. My plan is to refi it and pull some cash out. I've gotten a surprising amount of equity and think that (at 20% of the appraisal) I could pull 15k out cash. But raising my mortgage by $200/mo. The goal is to have the rental pay back that $200/month.

I've been planning on a Single-family, but reading a lot about multi-family. So here's my 2-part question.

I was planning on taking that 15k and buying a house cash. Maybe one that is listed for up to 30k and sitting for some time. Hoping to get it rent ready within a couple grand. I'm in the North Atlanta area and I think I could get rent on a SF for $800/mo.
Owning free and clear, lets put T&I at $150/mo. minus the 200 for my mortgage. i'm at 450. Minus the 50% rule i'm at $50! (I previously did not count the 50% rule). My plan then was to stack some cash and shortly after refi that house for about 20-24k and buy another house cash and keep going like that.

Now, with this 50% rule it seems that once i purchase the 2nd house, i'm loosing $$ on the 1st. But say I rent the 2nd for $900/mo. Minus 450, 200(T&I) i'm at 250. The first house is now added another 200 for P&I and say is at -150. Totaling me to a positive 100 between both.

Questions so far, is it safe to let one rental make up for the other? Also, how firm should I take that 50% rule?

After reading I came up with another situation. Possibly buying a more expensive multi family and using maybe 10k of the 15k as a 20% down. So say a 50k triplex. Using a calc, lets say PITI is 270/mo. maybe at 600/mo per unit i'm looking at 1800/mo in rent. -900 for 50%. -200 for mortgage. - 270 for PITI. i'm looking at $430/mo profit which sounds much better to me. I won't be able to refi and buy another quickly. But seems to be making more $$ with one property anyway.

I'm thinking of looking into lower income areas. Maybe 50k range is unrealistic for a triplex? Maybe i'm looking at all this the wrong way? Maybe i'm missing something completely??

I'm sorry if EVERYTHING here has been answered before. I've done some searching, but maybe not as much as needed.

Thanks in advance.

Don't forget to look at some QB alternatives. I did some personal research on this a while back and found that QB had really fallen behind. I honestly don't remember which specific alternatives I investigated though.

Thanks! I'll be sure to check those out!

And i found BP after doing some reading on Google. Few sites mentioned it.

I'm looking towards residential. Becoming a landlord. Going to try to finance my first property cash at a lower price that I can hopefully get rent-ready for a reasonable amount. If it works out, and after some time of building sufficient reserves, i'd like to refi that house i paid cash for for another investment.

Hey al. I'm Aaron. Recent (may) homeowner and decided that REI is something that I really want to get into. I am currently a System Admin and in school for Finance at KSU. I bought my home as a foreclosure and have some equity in it. My neighbor actually just did a refi and got appraised for 146k. I bought mine at 100k so I'm hoping to do some work and get close to the same. Then take the cash to invest in my first rental property. Currently I am working on freeing up cash flow by selling my car (bought a cheaper truck). I am always open to suggestions. Thanks all. Look forward to learning.