All Forum Posts by: Chip Clark

@Ronan M. By no means am I rich, but I do ok in my day job. The $100 is not a big deal. I have 2 more years left on my lease. It was my first time. Knowing what I know now, I probably would have worked a stepped increase into the lease, but I did not.

I do not need the cashflow for a new car or anything like that. It would go strictly for another investment. Of course, alone, this cashflow won't be enough for a down payment on another property for 7-10 years. 

The flip side to the cash flow is the pay down. My principal pay down now is about $850 a month. With the refi it will be just over $200. Everything I read about real estate investing says to invest for cash flow, but like @Matt Mason said, maybe the balance sheet is more important in this case.

I moved out of my previous house and am now using it as a rental. My plan at the time was to quickly pay off the house since it was my primary residence, so I opted for a 15 year mortgage. There is currently a little less than 11 years left on it. Now that I have a tenant in the house, I have been thinking of refinancing back to a 30 yr mortgage for cash flow. The current situation is a negative ~$100 per month of cash flow, but the principal is being paid down quickly. The refinance will be about a $550 swing, so a positive cash flow of $450. Because I bought the house at the peak in 2005, I paid too much by today's market. So there is no cash to take out with the refi. This would be strictly for cash flow. Also, my current interest rate is 3.125%. The 30 year rate would be 3.75%

What would you do? Take the cash flow to reinvest or let the principal drop quickly?

Thanks for the welcome everyone!

@Rafael Floresta

Sounds good man! I'm interested in meeting up learning as much as I can. I have thought about investing out of state. NJ taxes are killer. Yes, down by the power plant the taxes are extremely low because of the plant. They are really in the middle of nowhere down there though. Property values are pretty low also, so I will keep an eye on it. Its only like 10 minutes from where I live too.

Thanks. That is one of my biggest concerns with buying an occupied property.

My name is Chip Clark and I am just starting out. Apparently, I am like the majority. I read this little book "Rich Dad Poor Dad" and decided I needed to make a change. That in itself is kind of strange since I hadn't read a book since my Freshmen year of high school! I'm 35 and live in South Jersey. I am looking to purchase my first buy and hold rental property in the very near future. My grandfather had rental properties 30+ years ago. Other than that, I don't really have anyone local that I know to talk to about the industry. So if anyone is interested in meeting up and giving some advice, I would certainly appreciate it!

 If installed correctly, you should never have a problem again with PVC. If you are doing the repair yourself, then the small section may be practical. If you are having a contractor do it, I would just have it all done and never have to worry about it again. It would be pretty annoying to have to do this again next year 10 feet further down from your patch. My bet would be if you have one crack with roots infiltrating, then you have more.

I am looking at my first investment property for a buy and hold rental. It is a duplex with the current owner as the occupant and their son as the tenant of the other unit. The parents are moving out. The son would like to stay. I don't know if there is any contract existing with him since he was a relative, but will find that out before we make an offer. What do I need to watch out for with this special circumstance? Any words of wisdom since this isn't the most common situation?