All Forum Posts by: Bonnie Low

I'm not sure I understand your question. You have a primary residence with equity, which is how you're going to get a Home Equity Line of Credit (HELOC). You want to use the funds from the HELOC as a down payment on a second property, correct? Then you're asking if you would do a cash out refi of the primary to pay off the HELOC? Why wouldn't you just do a cash out refi in the first place and use the cash as your down payment on the second property? Your interest rate on the cash out refi is going to be lower than the interest rate on the HELOC in my experience. And, you can't keep the HELOC in place when you do a cash out refi so that won't work as a second step. The lender will make you pay off the HELOC in the process of doing the refi. Maybe I misunderstood something in your question?

On a recent podcast, @Joe Asamoah mentioned that he is incredibly exclusive about who he'll rent to, even though he primarily rents to Section 8 tenants. That might sound like a contradiction, but it comes down to his vetting process. He actually tells them he wants to come visit the home they're currently living in before accepting them. He wants to know how they actually treat their landlord's home rather than just relying on their word. His houses are nice enough that people understand they have to accept his terms if they're going to get their application accepted by him. I hadn't considered doing this, but it makes a ton of sense unless you're in a situation where you're desperate for tenants. Sounds like you've got plenty of potential tenants so you can afford to be choosy. Good people sometimes have bad credit for a variety of reasons. People with good credit sometimes take your home for granted. There's just no one answer that fits, which is why I really like Joe's suggestion.

You can learn to do pretty much anything on Youtube, including installing baseboard. It's not hard and looks much better than 1/4 round. It's a little pricier, but a much more updated look.

I would not recommend contacting the seller's agent. Remember that, first and foremost, they have the seller's best interest in mind - not yours. I have used a few tactics to find an out of state Realtor. First, look here on BP for a Realtor that is very active in the areas you're interested in. Second, identify a local REI meetup and attend either in person or remotely. There are almost always realtors at the REIA meetings and even if there aren't, you'll have the opportunity to ask other investors who they recommend. Those investors are going to be familiar with Realtors who represent investors, and that is key. Many Realtors don't know how to work with or think like investors and those are the ones you want to avoid. Lastly, do you know anyone in the areas you're looking at? I've always been able to tap my friends and family network to get recommendations. When I call someone I don't know I make it clear that I'm looking into their market but am also looking at other markets and am in the process of narrowing it down. I start by asking how much experience they have working with investors. If they say none or kind of waffle on their response, I'll keep the phone call polite but short. If it seems they do have experience working with investors, I'll explain the criteria I'm looking for and then ask them some very specific questions about their market (average days on market, how many months' inventory, YOY housing values) and then get more specific about narrowing down neighborhoods. For example, if it's a college town and I'm interested in college rentals I'll ask them what neighborhoods to look at. Same for blue collar rentals, etc. All this can be done in a 15 minute phone call. If you like what you hear from them, ask if they would set you up with a daily MLS alert matching your criteria. Most of the time, they offer to do this without you even asking. I live in CA but have worked with Realtors in this fashion from Idaho, Montana and Nebraska. Oh, and I always send them a Christmas card and a gift certificate for a local coffee shop at the end of the year just to let them know I appreciate their time.

While your idea is way cooler, have you considered turning it into a senior housing community? Seniors who are still independent but want to live in a communal environment are a lucrative up and coming market.

Hi, Jonathan - I don't know if the appraiser is trying to screw you - but he definitely sounds very unprofessional to say the least. Were you getting an appraisal to find out how much your property is worth so you could decide whether or not to sell it? In other words your agent couldn't give you an ARV based on all the work you did so you wanted an independent appraisal in order to understand how to price it? I ask because usually the lender is the one who arranges for an appraisal, not the agent. That's the person I would be looking at in this deal - why can't your agent give you a value and does he or she understand this appraiser isn't very professional? I have never, ever heard of an appraiser saying they can give you a value based on what you tell them the inside looks like. That's a red flag for sure. Maybe call the state board that regulates appraisers and ask them what they think of this practice and what recourse you may have.

Hi, Karlo - did you mean to say you have to put 10% down with an FHA loan on a 4-plex? That sounds more like it. I've never heard of an FHA loan charging 10% interest. If so, run for the hills and find a different lender who can get you set up with a better deal! That would be like paying a hard money lender for the life of the loan.

It seems like with this Coronavirus situation dragging on, people are going to be getting rid of their luxury items they can no longer afford or have sitting around that could be cashed in. Have you looked for a good used travel trailer? Depending on how much luxury you're looking for, you should be able to pick one up pretty cheap. If you don't yet have kids, now is the time to take on an adventure like this. Seems hard to imagine that you couldn't get more in rent on your house hack than your living expenses in your trailer. Like they say, 'live now like other people won't so later you can live like other people can't.' Good luck to you!

@John Underwood I've been thinking more and more about the Section 8 play as well. Since the gov't pays the greater portion of rent for a S8 tenant, I'm wondering if there will still be forbearance for landlords who can't pay their mortgage if their tenant is S8? Have you seen anything about the Coronavirus bills that address this? In other words, if landlords who don't have a S8 tenant can avoid foreclosure for non-payment of mortgages, will this still be allowed when most, but not all, of their mortgage is covered by the S8 payment?

We're doing a 75% LTV right now, but we also have a history with our lender so that might be helping us. This is also only the 2nd property we will have a mortgage on currently.