All Forum Posts by: Corby Goade

Hey Stephen- I am in the same boat, so I'll keep an eye on this conversation- still lots to learn! One thing we've been exploring is consolidating our mortgages into one commercial loan. You'll pay a higher interest rate and have a shorter amortization, but if you've paid down your mortgages, you might not negatively effect your cashflow. You could tap in to some of that equity and free up your ability to acquire more Freddie and Fannie loans. 

I generally agree with @Justin Owens. Buying a distressed property that is poorly managed can create all kinds of opportunities. Add the cost of those repairs in to your budget, and if the numbers still work, you might want to move forward. Keep in mind, you are running a business, not dating the sellers. If they are terrible landlords, you get to swoop in and be a hero for those tenants. 

Awesome, congrats! I'd take deals like that all day long.

I was/am in the same boat. I went with a HELOC to give me flexibility to jump when I wanted without having to pay interest while I was shopping. The upside to the cash out is that you have cash (obv) and can sometimes get a little higher LTV, and are locked into a rate, but you are paying interest from the day you close. With the HELOC, you have the cash available, but aren't paying for it until you use it. You can cash out your investment property after you buy it and get into a locked rate. Of course, you are then taking the risk that rates might go up. There's pros and cons to each, just have to decide what works best for your risk tolerance. Good luck!

Just curious why you think getting another conventional is doubtful? Why not use your HELOC for a down payment and get another conventional loan? As long as you meet the bank's requirements, you can have up to 10 at a time.

Bumping this conversation- I've had a several brokers PM me offering their services, but no one has given me actual advice or been able to answer my questions above. I'd love to hear from someone in the know.

Nope, you aren't missing anything, it is slow, very slow. What is the alternative? Wholesaling or flipping? Those are both reasonable ways to make money faster, but there's a downside to that too. When you buy a fixer, repair and sell it, cash your check- then what? You have to do it again. As a wholesaler, same thing. you aren't building equity. Not to offend any flippers or wholesalers, but I personally don't see that as investing because you aren't building any long term equity or wealth, you are actively working for a paycheck. Flippers are wholesalers are self employed and it is a job. A very difficult and risky job. The IRS taxes that income as regular income as well.

In buy and hold, the monthly returns are usually much smaller, but it's generally passive and you can depreciate the house for 27.5 years. The greatest benefit is that you have equity that slowly builds in the house and will pay you dividends forever, maybe your kids and grandkids too.

There are many flippers and wholesalers out there who do really well, but if you ask, most of them will tell you that the reason that do all of that hard work is so they can buy and hold- that is where wealth is built. Good luck out there! 

Hi @Scott Radetich, it was a refi on my primary, so that could be true. However, I did talk to the same rep there yesterday about cashing out a rental that I own free and clear and he gave me a quote. I haven't applied for the loan yet, so maybe they'd shut me down. 

Sure, not expecting anyone to predict where rates will be in the future, just trying to wrap my head around a cash out refi of an investment property and what options are out there. 

Hi @Will Chamberlin, thanks very much for the reply. I was thinking I should be able to find something in the 4.5% range. I don't need the money right away, but rates are so low right now that I don't want to miss out. I'll keep shopping- thanks for the advice! Please let me know if you know of a solid conventional lender with experience working with investors that I could chat with.