All Forum Posts by: Chris John

@Giles D.

@Lane Kawaoka

Not sure why these links aren't hyperlinked, but I'll try it anyway...

Gentlemen, I think I speak for a lot of people when I say that I'd LOVE to see the email exchange between you two that led to @Giles D. backtracking on the other thread.  Either of you care to drop it?

 Good to see Lane Kawaoka kept some money set aside for lawyers.  Sheesh. 

@Tom Dieringer

I've not used HELOCs, so it's possible that my answer won't correlate, but we've refinanced properties and used cash out to fund new purchases.  When we did it, rates and prices were low enough (and rents were high enough) to still be in a cash flow positive position despite the higher mortgages.  That's dried up for us with the higher rates (and I suspect similar for the same strategy using HELOCs). 

Best wishes

Well, only half of the 37 doors are mine, but yeah, still teaching.  Thanks.

@Alan F.

You bring up great points!  I doubt they've even thought about the points that you've brought up.  Sounds like a logistical, taxation, billing, surveying, etc. disaster waiting to happen.  I don't have any ADUs, but if I did I'd let you sell yours first to see how it went before I considered selling mine.  haha.

I'm a teacher so I value my free time above all else (except for God and family, of course).  My original goal was to buy 5 rentals and have them paid off by the time I retired.  However, market manipulation has presented a couple of opportunities to me since 2009, so I've ended up with more than I expected. 

So, I started buying between 2009-2012, which was a few years earlier than I wanted (I was hoping my wife would be back to work after raising the kids through kinder and we'd have two incomes). However, it was an opportunity I couldn't pass up for obvious reasons. My brother and I bought 11 SFR at that point, so I did have my 5.5 and thought I was done.

Then, while bored during Coronavirus, I came across biggerpockets and was convinced that it was a great time to refinance and buy as much as possible.  We're now up to 37 doors and a part owner in another small business.  We have property managers and don't run the small business, so my workload is minimal.

Of course I keep an eye on the market, but finding anything for a guy like me would be way too much work.  I can't compete with the actual pros and only buy when the market makes it absolutely obvious that I should.  I'm back to dormant and waiting for the next obvious opportunity, should it present itself.  I love Psalm 37:7.  I know it's not the exact meaning, but I'm a big fan of "Be still..." if you don't know what your next move is.

@Brandon Arnett

You've got some great answers, but you're thinking about losing $100k in liquidity for a delta of around $2760 a year or $230 a month.  I'd really, really think about that.

@Elias Halvorson hit the nail on the head.  Park the $100k at 5% until you find something better to do with it.  That'll give you around $420/mo instead of the $650/mo in savings, but:

- You'll have liquidity in case you find something better to do with the money

- You'll have the ability to refinance at a potentially lower rate in the future as @John Mason points out.

- You won't extend the term back to 30 years (which is definitely part of your monthly projected savings).  The delta on the 6.75% and 5% is actually only $145/mo.  The other $85 of monthly savings must be coming from extending the term.

- You won't have to pay all of the fees associated with a new loan.

I'd think long and hard before I buried $100k like that.  Heck, you can get a decent rental in many parts of the country with that much (either as a down payment or just paying cash) that would most likely yield you more than $650/mo. 

Good luck with whatever you decide.

@Jim K.

That's crazy.  It totally reminds me of this one time this guy found 873K and a rusty glock in the kitchen walls of a house he bought at auction.

Some guys have all the luck, I guess.

@Bill B.

I appreciate the response.  I've been really happy with the results I've had of keeping my properties, refinancing, and buying more.  In the end, I have come to the realization that I probably should've been 1031ing them all along though.  Ah well, a lesson to pass down to my children, I suppose.

Selling this property as it is transitioning out of being an owner occ makes sense though.  Thanks.

LOL.  I'm surprised that people are responding to this thread...  so you can imagine how I feel having responded to it myself!

:(