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All Forum Posts by: Chris Higgins

Chris Higgins has started 2 posts and replied 7 times.

Post: Is a "no appraisal" Line of Credit possible?

Chris HigginsPosted
  • Rental Property Investor
  • Fort Lauderdale, FL
  • Posts 7
  • Votes 10

@Johann Jells

I have never had to pay for an appraisal to obtain any of my Helocs (closed on the last one just a few weeks ago) . In most cases, banks usually have the option to either use an electronic appraised value or have the applicant pay $400-$500 for a full appraisal. Recently, I applied for a $75,000 heloc based on what I thought the current max of 80% LTV would be. Bank told me I needed a full appraisal for that amount and it will cost me $500. Called them up and long story short their electronic appraisal value was like $500 below what I thought my property was worth. So I just adjusted my Heloc application amount down to $74,900 and suddenly I no longer needed to pay $500 for a full appraisal. Not why I had to call and interrogate them before I got that option though.. 🤔

Post: HELOC to replace my current mortgage

Chris HigginsPosted
  • Rental Property Investor
  • Fort Lauderdale, FL
  • Posts 7
  • Votes 10

I agree with you @Thomas Rutkowski

@Frank Chamanara

Here is my 2 cents on this topic. A few years ago I refinanced the mortgage on my primary residence into a 1st position lien HELOC and definitely don't regret that decision. The decision point for me had less to do with the interest rate of the mortgage being fixed vs variable (and slightly higher) rate of the Heloc, and more to do with the flexibility I got from just having a single lien in the form of a Heloc. In my case, I had extra saving lying around basically making no interest (waiting for the next big investment or an emergency) and I also could afford to pay a lot more than the min payment due on my primary mortgage. However, I was always hesitant to throw a bunch of money at my primary mortgage because I wanted easy access to my cash for when a good opportunity presented itself. But once I switched over to just having a HELOC I then felt comfortable very aggressively paying down the HELOC balance on my primary residence (thus minimizing overall the interest I was paying even though the interest rate on my HELOC was higher than what it was on my old mortgage ). And if or when I needed back a significant amount of money, I just pulled from the Heloc. So now fast forward a few years and the HELOC on my primary has been paid down to zero and is still available for use.

So for me, this made sense based on my financial situation at the time. However, this may not be best the strategic for you if you have little or no savings and can't currently make significantly more than the min mortgage payment.

So, refinancing your primary mortgage into a HELOC is not going to be the best strategy in all cases. In some situations I think it's a no-brainer, in some cases I would advise against it, and other times it's a bit of a toss-up. It really comes down to your specific financial situation and your level of discipline.

Post: HELOC on a rental property: is it possible?

Chris HigginsPosted
  • Rental Property Investor
  • Fort Lauderdale, FL
  • Posts 7
  • Votes 10

fyi..I have done 2  HELOCs with PenFed pretty recently and the process was really smooth and painless. Only income doc they asked me for was a recent paystub.

Post: Attempting to analyze this commercial RE opportunity

Chris HigginsPosted
  • Rental Property Investor
  • Fort Lauderdale, FL
  • Posts 7
  • Votes 10
Originally posted by @Greg Dickerson:

Looks like a pretty good model. I think you can get a loan for less than 6.5% but i would leave that in your model just to have a little cushion.

 Thanks for the feedback, and I'm researching a few options now. @Greg Dickerson

Post: Attempting to analyze this commercial RE opportunity

Chris HigginsPosted
  • Rental Property Investor
  • Fort Lauderdale, FL
  • Posts 7
  • Votes 10

As apart of my 2019 goals, I plan to branch out from doing just single-family rentals to exploring opportunities on the commercial RE side of the world. So this is my first attempt at analyzing a commercial RE opportunity and welcome any feedback to see if I'm on the right track. This is a 6-unit multi-family building in FL with an asking price of $450,000. It's a single story set-up in good condition with relatively new roofs and a/c units. All units (5 1/1, 1 2/2) are fully rented with a combined grossed income of $4700. Additionally, the current rental income for each unit is consistent with the current market and location.  

My approach with this analysis was to start by running the numbers based on the current asking price, then work my way back to a price I would be comfortable offering (based on the analysis).  Some of the expense numbers were supplied and others I estimated. Additionally, I assumed 20% down with a 6.5% interest financing of the rest. Admittedly, I haven't gotten to "exploring commercial lending options" part of this exercise, so not sure how realistic is a 6.5% commercial rate. I do plan to re-run the numbers once I nail that part down, but for the purpose of this exercise, lets assumed 6.5%.

Here is a break-down on my analysis based on asking price, estimates, and current assumptions: 

Here I ended up with 5.56% cap rate, 86% DCR, and a $4133 negative annual cash flow. However, my goal is to have a min. cap rate of 8% and min DCR of 125%... and of course a positive cash flow would be nice :)

So after playing with the purchase price a bit, I determined the MAX I could offer for this property, based on current assumptions & criteria (min 8% cap, min 125% DCR, and positive cash flow), would be $335,000. 

Thoughts? Advice? How is my analysis?? (sidebar comment: BP could do with emoji support..my question seems a bit incomplete without a "shoulder shrug" emoji at the end :)

See breakdown $335,000 offer price below: 

Chris,

Post: first time caller, long time listener from Ft Lauderdale, FL :)

Chris HigginsPosted
  • Rental Property Investor
  • Fort Lauderdale, FL
  • Posts 7
  • Votes 10

@Nick Flint  Definitely man..word on the street is there a lot of good opportunities on that side!

@Eric Lopez  it made me laugh too :) probably from too much Nighttime radio with Delilah listening...lol 

@Bernard Reisz  @Jasmine NelsonThanks! 

Post: first time caller, long time listener from Ft Lauderdale, FL :)

Chris HigginsPosted
  • Rental Property Investor
  • Fort Lauderdale, FL
  • Posts 7
  • Votes 10

Hello BP world!  This is my 1st ever post, so be gentle. :)  I've been quietly soaking up content for about a month, and figured why not drop a quick hello in the New Member Intro section. Currently, I work full-time in the geeky software development field and also own and manage a few rental properties here in Ft. Lauderdale side of South Florida. Looking to both scale and ramp up my investing this year, and so far I'm very happy to have become a part of this very knowledgeable community. Well, I've rambled on long enough but I promise my next post will have a more substantial purpose. 

Chris,