All Forum Posts by: Brendan J.

Welcome Kevin, we're glad to have you!

In regards to the HELOC, most people would agree that it can be a great tool to use as interim funds. Since it usually is placed on your primary home and can be a potential risk to your place of dwelling, I would put a priority on paying yourself back. If you view a HELOC as an extension of your pocketbook for short term cash outlays, and not a permanent form of financing, you should be in good shape. Good luck!

Jacob, after two years (2 tax returns) of documented rental income, lenders will then use 75% of your rents as income and add it to your total Gross income (this is actually a high number to use considering less than half is viable for use per the 50% rule). They will also add your existing loans to your liabilities.

It is for this reason that people can go out and get approved again and again, because their finances are showing that they are still well below that ~30% Debt-to-Income ratio required for additional lending.

Welcome and best of luck!

Welcome Sam! For many, the bottleneck to acquiring several buy/hold properties for cashflow is simply the lack of available funds.

Fix and Flips find their way into most investors strategies because it allows the purchase of buy and holds at a greater rate. If you can be successful at even a handful of flips per year, you would be in a position to potentially add that extra property per year to your portfolio.

I think this is a great strategy to start out with. Soak up all the information available on BiggerPockets and be sure to ask for input along the way. Best of luck on your journey!

Daniel,

Your numbers above are correct and to see essentially $100 per door is encouraging. It looks like a great deal on paper.

Why aren't they purchased already? Your first statement of SHOULD bring in $500 in rent may tell part of the story. What if they can only fetch $475, $450, $425? Depending on what the true number is, it may have pushed other investors away because there is no room for profit at that purchase price.

Another item that may have discouraged investors is deferred maintenance. You're wise to lay aside half of your rents for a rainy day, but others aren't. Perhaps the previous owner has let several items on the building go too far? Roof? HVAC units? Without a formal inspection, it would be difficult to know how much capital improvements are required to get renters in ASAP.

Even if the $500 number for the rent above is correct, but there are $50,000 in capital improvements needed to make it habitable, there are many investors that will quickly walk away.

Just a couple thoughts.

Welcome Curran! Feel free to reach out with any questions and enjoy your stay.

Welcome Jess. Its good to see more people on here from our great State. I hope you really enjoy your time on BP.

Done. I like the one with the 3 black roofs best. Followed by the green stylistic roofs.

Curt Davis is fairly active on this site and is in the Memphis Area. He may be along to introduce himself shortly. Best of luck.

Welcome Ray. I wish you the very best as you explore this new venture.

Aly,

I shouldn't have just made a blanket statement because it certainly can be different for every bank. On the occasions that I've spoken with my bank (BoA), HELOCs are issued at a set level, say $50,000, but can be changed very quickly. Imagine a scenario where you sank the entire HELOC into a property downpayment but wake up one morning to a letter saying your HELOC has been reduced to $25,000 and you need to come up with the difference. That is what I meant by the 'temporary' statement. The main thing is that with a HELOC, you are now including your primary residence into a business venture. If the worst happens, I don't want them having a right to the house my wife and I live in. To each his own.

My HELOC is, and will, only be used for a cash buffer incase I get into unexpected costs associated with rehabs. If I find out I need a costly foundation fix that wasn't budgeted, your write your HELOC check to cover it, and pay it back in full upon close of the property. Again, each investor has his/her own comfort level.