All Forum Posts by: Brandon R

Frank,

Thank you for reviewing my post. I really want to be as well informed as I can on the investment decisions that I have been making. I was blessed with a chance to do this and I don't want to blow it. :)

"I like your concept, but have to disagree with your pacing. Be careful that you don't go too fast, and get rid of your outside debt. One way that I found to do this is perhaps sell a higher proportion to retire debt."

Could you please explain this further?

Is it a good plan to cash out at 80% or lower when I am selling on contract or even renting? Using the cash flow to pay down debt while getting my 20% downpymt back to buy another property. Maybe I shoud only go to 70% to get more cash flow and maintaining a more safe margin incase of vacancy, default on buyer/renter or if something major happens that I need to refi to get fixed...?

Brandon

When you say keep the house is that the same as selling it on contract or renting? How is it taxed if held more than 1 year?

Do you refinance other investment property to buy more investment property and if so what is the best loan to value ratio?
For example should I never exceed 70% or 80%?

Tony,

Yes the 80% loan to value is based on a current appraisal in todays market. My backup plan if the contract collapses is to ethier immediately change it to a rental or sell in on contract again with another 10% down. Then I have to factor in any repairs and the amount of time it takes to get people out and back in. Hope for the best. So far it is going great and I have great people in the houses. (fingers crossed)
Thank you for your response....

Well the houses I have been buying are around 15-30k and are typically worth 2x that when repaired. Most rentals in this area rent for 400-700 per month. So it doesn't make sense to rent or sell on contract a higher dollar home. If the contract buyer defaults then I want to be able to rent it. So if I owe 30,000 on a house that is worth 50,000 and I cash out at 80% putting 10,000 in my pocket before I sell or rent it. Then do I pay taxes on the 10,000 even though it is a refinance? I still put up 15% on the down payment and monthly income for taxes.

I used the same bank for all properties and all were kept in house. The only indication they have is once I am holding over 200k all further transactions must be approved by the board. Most important here is my debt to income. With each cash out I do with these properties I keep enough for the down pymt for the next one or two and pay off some personal debt. I think its good in both aspects. I just am not for sure if this strategy is good. At first I was all for it to get my debt payed off and increase my income. Now I am needing advice on if it is the right thing to do.
Is owner financing the right way to go? Is it better than renting them? Should I be cashing out at 80% of the value on the homes I am holding to buy more and pay off debt?

Thank you for your replies...

Hello Everyone,

I have been searching and searching for investing advice and finally I found this forum.. I am so excited. :D

I have been investing for a little over a year now and have purchased 6 properties. I have sold a few on contract and rent a few. So here is my question...

Is it ok to cash out at 80% loan to value before I sell on contract? Is this a good strategy? Or should I focus on a smaller %? My main goal when starting with little money was to do this to get back my down pymt while increasing monthly income so I can buy again. Then after doing the math it seemed safe to cash out higher because the payment I was receiving would still give my $100 per month after all is paid. I also require a 10% down pymnt and application when I do owner financing.

I have a great relationship with my banker and I just wasn't sure how this looked. Is this ok to do??????

Thank you for your advice