All Forum Posts by: Brett Weaver

Mortgage lenders / banks will look at the value of the property to determine the max amount of the loan (the LTV). The max for your first few loans is 75% of value typically for rental properties. Whether they give you a loan or not depends on several factors including your debt-to-income ratio. Some of any existing rental income can be counted toward your income. The down payments on your existing properties don't really matter, except that the down payments affects your total debt which affects your debt-to-income ratio.

Hi Michelle,

Welcome to BP!

When you say "pull out" the equity, you're referring to a cash out refinance. With most banks and commercial lenders (backed byFannie Mae / Freddie Mac ) your max LTV (loan-to-value ratio) is 75%. IF you were to do the refinance you described above you'd only get $5000 cash out. (less the costs of obtaining the new financing)

Search BP for the "BRRR strategy". The goal is to purchase that property at 70% value LESS any repair costs (Buy), do the fixup (Rehab), get it Rented, hold for six months minimum and then Refinance at 75% LTV, which should give you all your money back out + 5%. At least that's the idea on paper. You should not get hit with capital gains unless you sell.

I'm less confident about my answers to your last paragraph, but here goes:

Everything is negotiable.  Most of the time existing leases survive the ownership transition.  If you don't like the tenant(s) you wait until their lease expires and then do not renew it. Gracefulness of exit varies :-) Deposits should get transferred from the previous owner to you during closing.  Again, make sure to address this during purchase negotiations.

Jorge,

If I understand your situation correctly, you have two free and clear duplexes...  Ask your lender about a cash-out-refinance on one or both of those paid-off properties (they can possibly combine the two properties into one "portfolio loan").  You can typically pull out up to 75% of the appraised value (the equity) if you have owned them a minimum of six months. 

So you take appraised value x .75 = Cash out.  Your collateral (equity) has been converted into a liability (mortgage) and an asset (cash).  Use the cash as a down payment on your next property and your monthly cashflow is reduced by the amount of the new mortgage.

I have two properties that were purchased using the equity in our primary residence (extracted via a mortgage and a HELOC) and I will probably do the same thing I've described above with the rentals once I find my next property.

Hope that helped!

@Chris Bingham The free Wix plans don't allow the site to be accessed via custom domain. 

I agree with the other advice given. Either pay someone to set the site up or go with Squarespace as @Herman Herrera has suggested.  

WordPress.com might be an option, but even there you have a learning curve. 

You'll have to decide what your time is worth. If you want to blog consistently you will use it enough to learn it. If you are going to set up a static site and update every once in a while, I can pretty much assure you you will forget what you learned between updates (with WP). The a big update come out and a plugin breaks and now you have to research how to fix that and on and on. 

Stick with a hosted solution or hire someone. It doesn't have to be expensive. 

Hi @Chris Bingham

I'll attempt to help having lots of WordPress experience, but no Wix experience.

My first question is, which Wix plan have you signed up for?  All the Wix plans seem to have free hosting, which would negate the need for 1&1 hosting.  Sounds like you have at least the "connect domain" Wix plan...is that correct?

If that's correct, it should be just a matter of changing the "name servers" at Namecheap (which I also use - good choice) to point at your Wix site.

Let us know a little more about your situation and it should be no problem to get you up and running.

Mel,

Here are some thoughts:

Duplex deal

If you are comfortable in your apartment I would stay there.  You'd be leaving $470 per month on the table if you moved into one side of the duplex.

Duplex deal vs Flip

You didn't share any past experience, but if you get the right deal in the right market, and are good at project management, having the flip experience under your belt would be beneficial.  It would be great to use profit off that deal to make your first buy and hold purchase.  However, there are many variables and much risk if you don't have experience doing a rehab.  Not enough info here to give a strong opinion.

Sounds like you guys are good at saving money. If the duplex cash flows well, then that sounds like the best first deal to me. If there is opportunity to fix it up and force appreciation (Search for BRRR Strategy) that would be ideal. You'd get to learn rehab and get your money back with a cash out refi potentially.

Bill,

Judging from my conversations with lenders, there is no hard and fast rule for the "seasoning period" for refinance.  I heard an investor on one of the many podcasts I listen to (can't remember which one) said that he went from bank to bank until he found one that would refi shortly (either immediately or within a couple of months).  My lender requires six months.

If there's a window of time that is closing on the option to switch to fixed interest, I think I would switch it.  Otherwise ride the 2.24% as long as you can. My $.02

Awesome.  Keep us updated!

I think it depends on how knowledgeable the seller seems to be. If they're throwing around REI / financing jargon, then feel free to do the same. If not, maybe lead into the discussion with a question: "Have you thought about doing owner financing / acting as the bank?". Another good thing to ask is have they thought about the tax implications of the sale? It may be in their best interest to get paid over time and therefore paying tax over time.

Ultimately ask questions (if you haven't already) and find out what the seller really needs to get from the sale of the property. Are they just tired of managing it? Do they need a lump sum payment for a specific purpose? When? Once you find that out try to structure it so that your proposal solves their problem and is a win-win.

They may want out of the property now, but not necessarily need a lump sum payment for a few years.  They could receive interest only payments for a few years and then a balloon payment.  That gives you time to get the rents up to market which should appreciate so that you can get better financing and pay them off. There are many ways to structure the note.

I've been in similar a similar discussion with a retirement age friend of mine about his duplex.  He hasn't put it "on the market", so in my case the conversation is being spread over time, but I'm hoping to be top of mind when he does decide to sell.

I'd be interested in attending a Florence area meeting.  Keep me in the loop please!