All Forum Posts by: Charlie Gomez

@Brandon Hausauer Thanks for the question. The answer is no I don’t need it. And you’re right my rate will go up .6% and I can live with that. I’m responsible with money and will reinvest it back into real estate and if things change use the cash flow to pay down my mortgage. I like the options I now have. Thanks for the thought-provoking question because it really did make me think!

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@Jason V. Thanks for the great thought!

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@Mark S. Thanks! Had to listen to it 4 times since there is a lot to process there. This is anti-Dave to the core but he makes a lot of sense.

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Originally posted by @Costin I.:

@Charlie Gomez Is this your residence or your rental?

My suggestion: complete Dave steps first, then do other things.

As for cash flow or pay off early, I just posted a longer answer to another thread just started about leveraged vs unleveraged.

Personally, I would keep the loan and not refinance - I don't think you'll see such low rate for other loans any time soon. I would leave it alone, or just make early payments till the principal payment is substantial bigger than the interest payment (like 80/20 ratio) and then let it ride.

If you refinance (which you can do at any time), what would you do with the cash flow? Do you have the means/knowledge/opportunity to put it to work at a much better ROI than the 30 year loan rate of interest, plus tax and inflation?

Thanks Costin! This is my rental. I may or may not live in it later. Living with mom and at some point will move out again. Thanks for the sounds advice!

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I am currently following Dave Ramsey’s plan on finance. If you don’t know it is summed up with 7 baby steps. I’m on step 6 which is pay off your home early. I currently have a 15 year loan at 3.3% with 11 left if I let it ride with no early payments. Im rentIng thIs home. After reading about cash flow I learned that I can refinance back to a 30 year loan and get about 700 cash flow. Should I bite the bullet and pay down the house and get 100% cash flow in about 5 years with early payments or should I refiance to a 30 get instant cash flow and save up for a second home? Thanks!

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Originally posted by @Derek Janssen:

Originally posted by @Charlie Gomez:

Originally posted by @Derek Janssen:

Originally posted by @Mike Bolen:

@Charlie Gomez have you thought of selling the rental you have now and redeploy thoat money into a less expensive investment? If you take a look at the rental calculator here on BP you are probably subsidizing someone’s living expenses with your current rental. As an example if your current place is worth $500,000 and you’re getting less than $5,000 monthly then you’re subsidizing your tenants living expenses. Redeploying the money in a less expensive market should greatly increase your monthly cash flow.

What you're giving up on cashflow, you may be making up with appreciation. If you're looking for pure cashflow, you will suffer on appreciation and vice versa. I prefer a hybrid market for investing. One that cashflows and appreciates modestly.

Thanks @Derek Janssen, that makes a lot of sense! Thanks also @Mike Bolen! These two comments have definitely got the wheels turning. Right now my rental is definitely subsidizing my tenants cost of living. For now that is ok for reasons I can't get in to. This definitely adds some perspective to my next purchase. Looking in Austin Tx, suburbs for a cash flow property. Still weighing out saving up as much as I can and buying or buying now. Not sure which is better.

I have a buddy who is selling 3 rentals in Austin and buying in Jacksonville.

Property taxes are killer in TX. I bought a brand new SFH in Rockwall outside of Dallas and the property taxes were like 2.8%. Also, in that area, they are subject to hail storms which can cause some serious damage. I am investing in Phoenix. I'm able to mitigate the cashflow issue by self managing with the help of my realtor. Good luck.

Sources?

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Originally posted by @Derek Janssen:

Originally posted by @Mike Bolen:

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Originally posted by @Allan Bishop Jr.:

@Charlie Gomez - Texas is a great location with many different markets. Austin can be expensive but some of the other cities just north of Austin are a little more affordable (Round Rock, Georgetown, etc.). Also, I just moved from the Killeen area which is north of those cities. It's right next to Fort Hood (Army post) which is a large rental market. A lot of investors look there. I've lived in that area three times (my current rental is there). If you have any questions about that market just send me a message. I'd be glad to give you some details and/or answer any questions.

Hey Allan, tried sending you a message. I cannot message you for some reason.

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Originally posted by @Allan Bishop Jr.:

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Thanks for the advice Caleb. I'm currently renting out a 3-1 in Napa, Ca on a 15 (not 30 year fixed.) I have 30% paid off after following Dave Ramsey's plan. I do not want to buy in California anymore for investing purposes since the cost is so high. Hence, I'm looking out of state. It doesn't have to be multi family solely, just cheaper with a decent ROI. I do agree with you that movement beats meditation, and experience is the best teacher, however, a nice book to show me some pointers would be nice to read so I can have a ballpark view of what's ahead. Thanks for you response!

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All Forum Posts by: Charlie Gomez

Charlie Gomez has started 2 posts and replied 15 times.

Post: Should I refinance?

Post: Should I refinance?

Post: Should I refinance?

Post: Should I refinance?

Post: Should I refinance?

Post: Hi : looking to buy out of state

Post: Hi : looking to buy out of state

Post: Hi : looking to buy out of state

Post: Hi : looking to buy out of state

Post: Hi : looking to buy out of state