All Forum Posts by: Chris Coleman

Again, I can't speak specifically to the rules as I'm not an accountant...just a business owner and real estate investor who has done it.  But from my experience you can depreciate buildings and equipment used in the operation of the business.

Correct.  You would owe more on the loan(s) than what the property would be worth. 

@Matt Bailey yes that makes sense.  Its one conventional loan.  So if you go that route, you could have better cash flow, less down-side risk, and still potentially cash-out refinance after 6 months if the lender allowed.  Something to consider.

@Liam McGoldrick a bad scenario is that the market goes south and your properties end up for less than what you owe, AND you can't get positive cash flow.  For this reason, you want to make sure that you are getting good cash flow on both properties and do not over-leverage.

In other words, before you take out that HELOC on the first property, make sure that its still going to give you a healthy positive cash flow once the new loan payments kick in. You want to make sure that you're cash flowing positive on both properties.

And do not take out too much equity via the HELOC on the first property such that you would be upside down if the value of the property were to decrease by 15%-20%.

@Brandon Green that's great to hear. Yes, I'm investing further out in VA and down in TX markets.

@Jake Barney it is indeed tough to cash flow in NoVA. But as others have said, the appreciation in the right submarkets is very good. I don’t invest for appreciation, but it is good in this market.

Have you considered going down into Richmond? Even Fredericksburg and south.

Also, in the I-66/81 corridor like Winchester.

@Matthew Bruce Bailey why couldn’t you cash-out refinance after 6 months with the conventional loan as well? Of course, confirm with the lender, but the seasoning period is generally 6 months after close.

You may want to look into this, as the first option gives you more cash flow, which will be good in the unfortunate chance that you don’t end up with enough equity 6 months later to do the refinance.

@Benjamin Quaye it really depends on the Lender. But you can get conventional financing on a duplex, so you’re looking at 75%-80% generally speaking.

@Liam McGoldrick Yes, one year is a long enough seasoning period. On average, it’s actually 6 months.

@Danny Galvan if you’re looking to invest in multifamily syndications, then there are plenty of good Sponsors that you can check out. You want to know what your investment goals are in terms of annual returns, holding period, minimum investment amount, property class, and potentially target market.

The number one thing is to vet the Sponsor well and make sure you are comfortable investing your money with them.