All Forum Posts by: Casey Randall Lenz

Great idea, maybe there will be some at a decent interest rate.  From what I hear, closing costs on a mortgage or refi in texas, costs the same amount, whether the loan is 30,000, or 300,000. So if it costs several thousand to do the loan, and there is low interest rate on a low loan, they have came out even and the loan was not even profitable.  Seems like a flaw in the Texas laws on lending that needs looked at if this is true. But somebody has a way around it i'm sure, I'll make some calls tomorrow. Thanks for the idea!

Not sure what section to put this in. 

Anyways, I have 37,000 left owed on my 10acres and home, which just appraised at 83,000. My interest rate is 6% adjustable to 14%. I would like to refinance the 37,000 with a fixed interest rate, and also get a lower payment, which would make some room for some other investment ideas I have going on. But it seems nobody wants to refinance this amount.  As soon as you say 37, they immediately are  uninterested. I have considered pulling all the equity out, refinancing the whole amount, about 64,000, giving me somewhere around 25,000 equity, and putting that towards my other ideas, but in the state of Texas you are not allowed to have Ag Exemptions when you cash out a refi, meaning I would have to cancel my ag exemptions on my acreage, which costs me thousands of dollars and raises my property taxes tremendously. Local banks want 8-10% interest.  Really don't know what to do here. It's holding up a lot of other ideas i'm trying to jump on though. Suggestions?

Not sure what section to put this in. 

Anyways, I have 37,000 left owed on my 10acres and home, which just appraised at 83,000. My interest rate is 6% adjustable to 14%. I would like to refinance the 37,000 with a fixed interest rate, and also get a lower payment, which would make some room for some other investment ideas I have going on. But it seems nobody wants to refinance this amount.  As soon as you say 37, they immediately are  uninterested. I have considered pulling all the equity out, refinancing the whole amount, about 64,000, giving me somewhere around 25,000 equity, and putting that towards my other ideas, but in the state of Texas you are not allowed to have Ag Exemptions when you cash out a refi, meaning I would have to cancel my ag exemptions on my acreage, which costs me thousands of dollars and raises my property taxes tremendously. Local banks want 8-10% interest.  Really don't know what to do here. It's holding up a lot of other ideas i'm trying to jump on though. Suggestions?

Greg, yea the original way I went towards this is what your referring to, and will not work because of the mortgage on the entire property, as you stated. Thats why I paused and thinking to refinance only the 37,000 I have left owed, and only on the house and one or two acres, instead of pulling all the equity out (64,000) on all of the 10 acres. If I refinance the 37,000 to only include my house and one or two acres, then the other 8 or 9 acres will be cleared and not under mortgage anymore. Hopefully then I would be able to just sign it over into a commercial business property or maybe into my business name, (?) whatever makes it cut ties with my homestead property and separates it. 

Clifton, yea I would like to talk to the guy, although it would probably have to include his house since he built them in his front lawn.  haha  But hey, thats just more rental property, I'm planning on bringing it up to him for sure.

Yea the containers are also normally sealed, from what I have heard, reducing pests inside the units. And I would think one could also put metal siding on the containers to decorate it up.

To be honest, I don't know what I'm getting into.  But I have learned a lot this way.  Study some, ask questions, and then just throw yourself into it, and learn as you go. I started a business and a few other idea this way, and although it sucks at the start, trying to keep up with a running business your new to, you learn quickly and more than you ever would from a book ;)  Yea i'm already running into issues at the bank, mainly with the Texas Homestead Law they keep telling me about, and having a building financed on your home property, but i'll see what they say if I have a paid off acre to itself.  They may still shoot it down, but i'll go ahead and ask anyways   haha

Definitely going to talk to some more people on monday about the laws and see what kinds of ideas they have.  I thought about the containers at first, but they look kind of ugly compared to a nice shop-looking stretch.  I may end up on that route though anyway. I never thought about it after the ag exemption issue, that's a great point. And they are removable if I wanted out of it, and are bigger than 10x10 for the same price.

I'm hoping to finance the acre the house is on since I have so much equity, which would release all 9 or maybe 8 acres anyways.So if I went that route, I could just sign over the acre myself to my business name I think..?

Haha, I doubt the guy will move, he's been there so long farming, but next time I see him I might bring up the idea and see what he says   lol.   

So it seems my options are talk to some people monday about getting around the issues, possibly signing an acre over to my business name after releasing the main acreage, and if nothing else, possibly go with some containers. I'm not really wanting to stick with the path i'm on at the moment, taking out huge mortgage for something so simple.  I may also check with the container sales place this evening and see what they are pricing at.

Yea for some reason the banks are afraid to loan on it because its tied to me. They are saying it's impossible because its also my homestead and banks in Texas are not allowed to finance something on your property that is counted as your homestead.   I'm considering starting a business name and selling the acre to the business that I own, if that would clear it? Because then technically it doesn't belong to me or my "home" anymore.  I'll find out Monday. 

I looked up the hard money loan, it seems to be higher interest rates, and says normally only for a year or two. This might be an option if I can find one that will go longer time. ?

I'm not sure why they are not expanding, all I can come up with is, since the guy is 70 years old, and has lived there forever.  I'm assuming his property is paid for. So maybe he doesn't want to have a loan out against his property again at his age? With no vacancies for years and a waiting list, that's all I can think of. Or maybe he doesn't want more of them in his yard.  This guy literally went out in his front yard and built these in the grass in front of his house, right beside the highway.  lol no fencing, gates, or anything, just sitting in his front yard. It worked out will for him though apparently.  

I'll try to keep this short, but it's a lot to explain. So I have 10 acres with my house in the country in Texas. Appraised at 83,000 two weeks ago.  I owe 37,000. I can pull out around 25,000 in equity on a refi. We are way out in the country, just some small farms, and a school, a few hundred houses spread out though over the surrounding miles. 2 miles down the road beside the highway is a 20 unit self storage, that has been there for many many years.  Its always full, never had a vacancy, and when I call the past 2 years, they tell me I can be put on the list, but have no idea when it could be. 

So I decided to stake off an acre, and refi my property and build a 20 unit strip. $45 per 10x10, same as down the road. Talked to many builders and found a guy with great reviews and history, 34,000 turnkey. Leaving me an easy 9,000 to pay for on my own that the equity didn't cover. This seems great.  Now the problems start arising..

In Texas I find you can't pull equity out of a refi while you have an ag exemption.  I must cancel my ag exemption, and pay the full tax, AND 5 years of back taxes.  Thats 3,250.  I don't like this idea, so I decide to only take out the refi on the house and one acre and no equity removed, leaving me with 9 acres cleared in my name. Then just finance the entire build on it's own acre. Nope, can't do that, in Texas under some homestead law they are not allowed to finance something being built on your property even if it is surveyed off as its own piece of property (I have no idea why, I had it explained to me a hundred times and it doesn't make sense, it is completely its own acre, but still not legal somehow). I'm almost left with no option other than to take my refi on the whole 10 acres, get my 25,000 equity, cancel my ag exemptions, and just build the stupid things. My property payment goes from 505 to 655, not too big of an increase to make up for. Then instead of using my own savings to make up the 9,000 short, I considered taking out a loan on my work trailer (its worth way more than 9,000). The payment for that loan would be 400. 

So basically, if the units are at full capacity, it should have the loan done in a matter of months. After that, (at full capacity) they would make 800 after insurance, ect. Subtract the 150 a month from my mortgage increase, and it's still 650 a month coming in.   Part of me says "hey, thats extra income, screw it, let's sign this and go on to the next adventure", but the other part of me feels like there could be something much less stupid than cancelling a huge ag exemption and taking out 64,000 just to have a strip of units that barely even make the payment for the truck I drive.  Is this a good place to start?  Is money, money? Or am I stirring to much trouble to bother with something so simple for a first investment idea?

I'm new at this, still learning how to properly get into renting.

I read about people (even young people with no money, supposedly) buying something like a duplex, or condo, or something similar and renting it out. And then 2 months later, buying another, and then in a year they have 7 rental properties or something. Financing is not an issue, I have 800 credit score, decent income, and some good friends at the bank, but what are these people doing for down payments?  I could write a check for 15K and buy my first one, but then I would have to save up for another year to have the down payment for the next one.  To have 7 houses in a year you would almost have to drop 100K out of pocket just in down payments.  So either you have a bunch of cash to begin with, or there is a way around the down payment issue.  Can somebody explain or direct me to something that explains how this works or what these people are doing?

I'm searching my first buy to rent out, and there are a few options in my town. The first option is a cheap condo in a pretty sorry part of town, (45,000 i think?), very large rooms, needs some updating. Second option is a condo in a good part of town, right beside a major college, for 85,000, built in 1984 and part of a HOA that maintains it. HOA fee is 170 per month, and with the college its pretty well guaranteed to rent. Or I could build my own, although coming up with the 30,000 for a lot here might be tough, I only have 9,000 at the moment, but the thought of very little maintenance is nice. Each has some ups and downs. The cheap one would probably have faster profits since its cheap, although being old, I would probably be dealing with problems with it, and being in the bad part of town, might find a meth lab in the bedroom with how that area is. The middle one is very well upkept, and is maintained by the HOA, and will definitely rent. Although at 900 per month rent, and 170 per month HOA fee, and insurance, there is basically no profit in it until it is paid off. The new build would be the least problematic, but 30,000 for the cost of a lot that I have to pay for up front every time I build is kind of high. What do you look for or go after when you are looking at town homes or condo's to keep and rent?