All Forum Posts by: Ben Kirchner

So in the example, wouldn't I be paying less and less interest every month/year , given the balance in continually decreasing?  So if I pay $1000 every single month, more is going into the principal in year 2, compared to year 1.  Thus saving me more on interest and overall cost?

I'm looking into taking out a HELOC for a future investment. I understand the HELOC fixed rate repayment (just like a mortgage). What I'm not sure I understand is the HELOC repayment process on a variable interest rate. To my understanding, a variable interest rate would only have an interest rate on the balance of the HELOC, and therefore would change throughout the loan, as I paid down the HELOC.

Example:

I borrow $80,000 on my HELOC at a 6% interest rate. I want to pay down $20,000 off the principal in the first year.

Year 1 - I pay it down to $60,000 principal.  I'm then paying 6% interest on $60,000, right?

Year 2 - Paying on $40k?

Year 3 - Paying on 20k?

In this example, my monthly payments would get lower and lower, instead of being the same throughout the life of the loan.  This of course has me thinking if I owe around $80k on a mortgage on a rental property , rather than paying 5.5% interest on a fixed 30 year term, what if I paid a variable interest rate on just the $80k.  I know I've seen some talk of this on other websites, and wasn't sure if it was a legitimate strategy, or if I was missing something.  Anyone who could provide more insight, I would appreciate it.  

Good points. The area I'm looking is New Bern, NC. What's been presented is $1200 per week, for 28 weeks of the year. I'm unsure if this is realistic, but admittedly do not know that area well. I'm unsure of the HOA fees and such.

Does anyone have experience with short term rentals? I'm in discussion of some condos on the coast. I've been told some condos are getting $1200 per week to rent. Certainly a better return than even many very good cash flowing long term rentals, even with 2/3 of the year having a lot of vacancy.  Are these numbers realistic?  Are there resources to analyze these numbers (such as a rentometer-like site).  Any other sharing on experiences within this realm are appreciated.

Curious to get input on any who have invested in land. Currently, I’ve focused all my funds towards buying rental property. 

I’ve recently been connected to an individual who invests in land. The numbers he projects on a return are quite promising. Estimated return would be 46% on a 12 month commitment. Too good to be true? Possible on the right area? 

The area is doing a lot of development, in what looks to be a very desirable area. If anyone has experience in investing in land or could provide good resources where that could help with  my due diligence, is greatly appreciate it. 

Looking to rent a house in Garner, NC. 3 Bed, 2.5 Bath, 1560 sq ft. I've hired a property management company to find a tenant. This is because it's a 40 minute drive, and I do not have time to screen and meet for showings, with my full time job. With them just charging half of 1 months rent, it's a good trade off for me.

However, I will say that the place is not seeming to have success in renting. The rent price is $1250, which is fair according to rentometer.com as well as what the property management company says. In fear it will still remain vacant in August, I've lowered it to $1225. I really thought this time of year, I wouldn't have a problem finding a tenant. However, there hasn't been a ton of applicants, and every applicant has had red flags. Lack of income, or a history of evictions.

Any suggestions on what could help this situation are appreciated.

For me, it makes sense to pay someone to find the tenants for me.  I have properties that are 40 minutes away, and my full time job keeps me too busy to be able to make that commute often to show the property. In the past, my phone was going off like crazy. Many of the people inquiring flake out and stand you up for meeting at the property.  I have found I'm better to just pay the half month's rent to enable a company to show the property, run the background checks, and meet the valid candidates after all the tire kickers have been filtered down to paying the application fee. 

Still looking for suggestions on a property management company that can help with a tenant placement service.  

Are there any recommendations for a property management company to hire for tenant locator services?  I'm only looking for a company to find a tenant. From there, I am able to self manage. Any recommendations would be appreciated.

I've used one in the past that charges only a half month's rent to find a tenant, screen them, and sign them to whatever terms you agree upon.  However, I feel on my latest rental, they are under performing.  Not advertising well, not in communication with me throughout, and leaving a vacancy in my rental.  Seeking a new company to handle this.  Thank you.

Has anyone invested in these 4 Bed/4 Bath condos right by NC State? They seem to come on the market quite often. My lender has a list of things needed from the HOA in order to approve a loan for a condo. Curious if anyone has gone through this process, if they were approved for a loan on it, and how the rental has worked out for them.

Thanks

Ben

I'm curious to what areas North Carolinians have found to be a good % return when considering purchase price to rent.

Personally, I live in Durham.  Unless I'm buying a wreck and doing a bunch of rehabilitation, I don't see getting 1% rent.  I have invested in Garner, NC (35-40mins away) with several properties.  For these properties, I've purchased them all under $100,000, and have been able to rent for $1100, with my newest addition expected to rent for around $1250 after some rehabilitation.

What other areas are good to look for this price point (~$100,000) and this type of rent return?  

Also, I've considered looking to higher end properties (~$200,000) in NC, but my thought is in North Carolina, if someone is going to pay $2000+ a month, they're more than likely going to buy a house.  While some may be only in the area for short term periods, I would imagine this would be a smaller crowd than those renting for the ~$1000 range.  I'd be interested if others in the area have found the same, or different.