All Forum Posts by: Brian Barfoot

Thanks all. It's good to be a part of a group who understand how much fun this is and don't just give me that "must be nice..." look.

@Charles Kannair I think I understand your worry: Taking too much cash-out money will increase the monthly expenses and affect cash flow. Our refi rate is 2% below the original "paper-saver" mortgage (documentation free, remember those?) so we will be shaving some money there. I've been charging under market rents on the house and have already warned the tenants that the rent will creep up over the next few years. They still feel like they are getting a bargain because the cost of living is so low in this area. Even if I stay $100/bed below the next door neighbors I'll come out ahead and the tenants will think they're ripping me off.

@Jay Hinrichs I appreciate your concern. We still have 30% equity on assessed value and I've had offers from local investors that support the assessment. I feel good that our exit strategy is still solid if it ever comes to that. Lender is a broker (I'll write a new post on brokers and their pro/con list soon.) I think I've just reaped the rewards of living in a construction site for a few years. I basically ran an epically slow flip.

So a little backstory first: Ten years ago I moved back to upstate NY looking to buy a starter house for myself. The original plan was to get a duplex and house-hack but the realtor talked me into getting a single family for $37K and rent out the rooms. My girlfriend (now wife) moved in a few months later and we never rented any rooms but we did rehab the house in a major way (added a bathroom, new wiring, new insulation, roof, etc.) We moved out and started renting the whole place out to some grad students and since we had already done so much work it started cash flowing well right away.

Here we are two years into that house being a rental and it occurs to me that I can do a cash-out refinance. I now also have another rental with a partner and another on the way. We go through the paperwork and this afternoon the bank just handed us a check for $58,000 for BUYING MY OWN HOUSE FROM MYSELF! It still seems impossible that this is legal. How can this much money appear from nowhere? We are looking into at least two more purchases with the money from the cash-out. I may not have hit my powerball numbers but this feels almost as good.

I'm interested to know what answer you get. I have a property bought in my name but then sold to a 50-50 LLC I'm a part of. I'll be checking with my CPA about this soon as well.

Hi Benjamin,

        I'm also in the Syracuse area and considering getting my RE license. I'd love to talk with you about good options. I have a few properties going right now but I think it will make things easier for logistics to get access to everything. I think there are a lot of good opportunities here for someone who's willing to look.

So I have a partnership that just turned into an LLC. We paid a lawyer about $1800 to do all of the paperwork and transfer one property's ownership. This felt high but my partner is associated with the firm and felt doing business with them would be beneficial. I want to form another LLC for the properties that I own outside of the partnership. Is there any strong reason to use a lawyer for this instead of just doing it through the state? (NY in my case.) If you use a lawyer, how much is reasonable to pay?

Yeah. Avoid PMI if you can. It's a monthly fee to help the bank feel better about trusting you. Personally, I find it insulting.

@Dana Hoffmann We use Citizens here. They have the same quickbooks transfer and they have more convenient hours for our needs as well as better fees/rates. 

Thank you. That's a good place to get us started at least.

Hi Greg. Always good to see another Upstater here although I'm a little more up than you. I ran the Kingston Marathon a couple of years ago so I've had a brief tour of your market on foot. I think you should be able to find good deals where you are. Be patient. It's easy to jump at an O.K. Deal instead of a really good one but it will be more worth your money to find one with a solid cash flow. Good luck!

Alan, I'm sure you realize yours is a pretty good decision to have to make. You might want to look into pulling some equity from the condo and using that as a down payment for your own home then renting out the old one. I had a similar situation a few years ago where I had improved the value of my home and had the rent/sell dilemma. An investor came by and made an offer but once I had his estimate I was able to talk a bank into giving me 75% of that as a cash out. Long story short, the original house has been renting steadily along and I have two more rentals that I've purchased with the money from the cash out.for