All Forum Posts by: Bonnie Williams

Hi @Levi Lewis ,

I think you're asking if you should refinance or leave your cash in. If that is the case, it may depend if you can get a loan or the cost of a loan. Noting that I'm no expert, I would shop some mortgage options... this means you will have the conversation with several lenders, products (loan options/costs) vary greatly.

You currently have 35k in and refinancing will require (I assume) you to leave in 15-20%, or $11,000 -$15,000. Plus, you will have to pay closing costs, let's say $4,000.

Let's say you're in for $15,000 (20%) down + $4k in costs = $19,000. Now you cash out $60k.

Weather you finance out or not depends a lot on if you have any other funds to work with, if you NEED the money now, or if you just feel better if you have the cash in the bank. If you are collecting great rent, maybe you save yourself the 4k in closing costs and pay yourself back (save) before doing the next deal.

I have a business partner so we cash out as much as possible to reduce our liability exposure (The less money we have in the property, the less someone could potentially sue for) and so we can keep as much money available for growing our business as we can. But, I still love the idea of having a paid off property and saving closing costs and interest payments.

As far as tax advantages of financing or not, you should consult an accountant. Maybe another member could drop some knowledge here.

Hope this helps some!

Hello @Russell Brazil, I mis-wrote and checked with my business partner who handles this stuff (but, that I still should have understood better)...

Our attorney said we can ask either ESA or Service Animal users for written verification from their (the human's) health care provider stating the service animal is medically necessary. We cannot, and would not, ask what the human's physical or mental condition requiring the animal is.  We also ask for a records from a local vet showing the animal has up to date shots. Hope that clears my earlier post.

To everyone and on another topic, someone mentioned not discriminating based on Federal regulations and listed sexual orientation. Here in TN we (shamefully, as far as I'm concerned) can discriminate and not rent a property based on an applicants sexual orientation. We would never consider doing such a thing and I hope this doesn't spark and moral debate of that law as that solves nothing here but, it is an excellent example of how laws vary state to state and it's a good idea to learn your local laws.

Now, let's all go find a deal this weekend!

An easy way to handle service animal inquires:

We read the laws and put policies and procedures in place before we had the first applicant come our way (Just finished first year of owning rental properties.)

We require a letter from a LOCAL veterinarian so we can call and verify the information (as we do will ALL information on the application.)

Right out of the gate a woman supposedly had four service dogs. We explained we were 'happy to accommodate and, as she be familiar with it, we would need to see her certification paperwork from a LOCAL vet....' Never heard back from her.

Hope this helps.

Hi Matt,

First, where did you get the awesome interest rate on the HELOC??? (Sorry, I had to start selfish)

My business partner and I used our HELOCs to pay cash for our first two rent-ready properties. We financed the properties after closing in order to pay down the HELOCs and allow us to continue buying. Buying rent-ready does lock up more cash but, gave us the opportunity to learn how to be landlords.

House three was a complete reno. When purchased it was already down to studs with no electric or water in place. The project when 2 months over due date and I can't even admit here how far over budget it went. Thankfully, it appraised well and we found a renter willing to pay what we needed for the "new" house in the not so great neighborhood.

Having the first two properties working and collecting rents gave us huge piece of mind when the reno (which we were inexperienced with and didn't have the right team in place for) went awry. Of course, everyone's risk tolerance is different and mine is pretty low; starting rent-ready helped me gain a lot of confidence.

We have just hit the end of our first year of business and started with about the same HELOC funds available to us... but with higher interest. Know your numbers! Don't forget to account for insurance, interest, trash service, etc. Treat your tenants (customers) as if they are in a retail store you own and give them a good product. Vet them well, treat them well, and you will do well.

Bonnie