All Forum Posts by: Clinton Davis

I'm trying to determine if it would be better to sell and collect this equity on one of my properties or keep it and continue reaping the nice cash flow it produces.  Here's the situation.

Home has a mortgage of 27 years remaining with a 6.25% rate.  

principle balance of $84,000

est. value = $190,000.

monthly PITI= $702

monthly rent= $1,300

Option a: keep the property and enjoy the nice cash flow.  

Option b: Sell the property and 1031 the balance to put down on 2 other properties.  Only thing is with the rates and property values like they are now my new properties will by hard pressed to make $200-300 per property to cash flow.  But I wanted to move into slightly better class of property so I could benefit from appreciation more.  

I am cash poor right now.  So selling sounds good in order to tap into the equity.  However, with renting, I'm making nearly $700 after piti and that's pretty hefty around here.  

Is it better to keep one property that's producing well or sell one to get two and have similar results as far as income minus expenses?  I think selling and buying 2 more will be good for potential benefits of appreciation.  But the cash flow performance will be about the same.  

I know what you're thinking. Keep it and just cash out refi. Well, that's also a possibility but I think my lender will only do 75% LTV which puts my new payment at around $1170 PITI with a $142,000 principle balance. That leaves me with $58,000. Of course there are a number of fees for the loan so let's estimate cash out of $52,000.

With this $50k I could finance one additional property.  I would decrease my cash flow (not accounting for maintenance yet) on the property A.  But still hopefully net ~$200/month.  While adding a new property.  

What would you do?  Thank you. 

Just wondering and hoping he and his family are doing ok due to the fires in Maui.  Anybody heard anything?  thanks.

Quote from @Wayne Brooks:

@Clinton Davis First, figure out if they are the Actual buyer as opposed to them just trying to wholesale it….did they show a Legit POF, how much earnest money did they place, are any other properties listed in their names in the county records, etc. I'm guessing you're buying one of Their contracts? Is there language about consequences of default? As a practical matter, no wholesaler or buyer is Really going to go through a Specific Performance law suit.

 yeah, I didn't think they would waste our time trying to get this house.  It's by no means a home run deal for them.  I was thinking maybe they're just trying to rattle me a bit to see if I'll cave but you never know.  Should I play hard ball with them and see if they'll go away?  Thanks for your reply. 

How bad do you want to help out these tenants? Enough to spend thousands?

Heck no.  I should clarify, I do feel bad for making tenants leave especially since they pay their rent on time, however, other reasons I would rather keep now is when I agreed to sell, I thought I was gonna need some extra cash to close my primary residence but turns out the extra cash is not needed anymore.  Also, it makes more sense to keep and pay down the principle and reap any appreciation I get and sell at a later date.  
I know I signed the contract, so yeah, I acted out of haste.  But I just wanted to see if there was any way to get out of it.  He said they would probably put the contract on title and that it would be there for 10 years and that If I sold it within that time, then I would have to buy them out of the contract?  I don't know.  If its too much headache I will just sell and take the quick cash but I just wanted to know what are some possible options.  Thanks for your reply.

Over the holidays after many calls from these homebuyers wanting to buy one of my rental properties I entertained the idea and signed a contract to sell a property of mine.  One part of the agreement is they want the home to be vacant at closing. These tenants are on a month to month lease and I did inform them that i may be selling the house.  The buyers wanted to do some inspections and had a contractor walk through the property.  After the inspection period they verbally came to me at almost 20k less than what we agreed on in the contract.  I said I was not interested and they eventually agreed to the original price on the contract.  

However, now I am not interested in selling anymore because I do not want to have to make the tenants find another place to live.  They have been there for 10 years. 

I know I signed the contract but I had second thoughts.  I let them know this and now they don't want to let it go.  

I've already told the tenants that I'm not selling the house.  But this homebuyer company seems determined to buy my property.  They said they are too invested in buying it now.  What should I do?  Can I get out of it?  Am I screwed?  What should I do?  Thanks for any advice.

Ok, I currently have 2 properties paid off in my portfolio, so I refi'd one property and bought another sfh in cash with that refi'd money.  Now I decided I would refi the new property I bought in cash and the other property I already had paid off doing a portfolio cash out refi.  Total cash in pocket now is $180k.  I've been wanting to step up in property values to around $150-$200k to have better rents and better class of tenant.  

So my question is this.  Should I continue to buy a house 1 at a time in cash, then refi out and go again. Or, should I just use the $180k and put 20% down and finance all purchases? 

The latter will get me around 5 properties taking into cash flow during the time and process.  The former let's me buy cash but I am looking at houses that don't necessarily need a lot of work but they do meet the 1% rule still.  On the refi's, my bank will finance up to 75% ltv, so my cash will dwindle down this way too.  

My current plan is buying around 5 properties using 20% down and financing them.  What would you do?  Thanks. 

Sounds like she's cheating and they are swapping plates to avoid being caught by either spouse or private investigator.  Take pics and audio, follow her home one day and mail an anonymous package to the husband.  Dang, that's so wrong of me to suggest.  But how desperate are you?

The Government needs to keep its nose out of the free market.  

Any story I've ever heard with lawyer tenants involved is always a legal dispute somehow or another.  Of course, this is not always the case and is probably rare statistically.  Them offering to pay more than asking is kinda a red flag for me though.  

Originally posted by @Chad Hale:

@Clinton Davis Have you looked at getting a HELOC.

 Actually No.  But that's a good suggestion.