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All Forum Posts by: Cody Thayer

Cody Thayer has started 2 posts and replied 39 times.

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Carlos Ptriawan:
Quote from @Dan H.:
Quote from @Cody Thayer:
Quote from @Bill B.:

@Cody Thayer

Check your amortization table. Even if you kick in the $350/mo you’re probably paying off more than that on your loan, so you are not “losing money” (once it’s rented.)

I had a property with a negative cashflow of almost $800/mo because I wanted a 15 year mortgage on an expensive (to me) property. It lowered th internet rate more than 1/2% and saved me more than $500/mo in interest. I was also paying off $2,600/mo in principle. So I was kicking in $800/mo and the tenant was kicking in $1,800/mo. With a 30 year mortgage it probably would have basically broke even on cashflow but I’d still have 20 years of payments left. Now that it’s paid off with rent increases it brings in $3,000/mo cashflow by itself. If you have a decent job cashflow of plus or minus $300/mo isn’t life changing. Getting enough paid off properties to stop working is. You haven’t made any bad choices yet. 

People have no problem dropping $1,000/mo in to their retirement accounts with no cashflow, this is your retirement account. 


 That is a really good point Bill! I will say this, and it’s going to sound very ignorant of me. There are a lot of tools out there that I think I’m missing, such as an amortization table. I don’t have any guidance from friends/family, which is fine, but I’m learning everything from asking questions like this. Do you have a good resource(s) for me to research and pull these tools/tables from? It would help me with the math and margins where I struggle with naturally lol 


 >Do you have a good resource(s) for me to research and pull these tools/tables from

Virtually every mortgage calculator will give access to the loan payment/amortization table. On my phone I have ZillowMortgage app that I can quickly run loan scenarios and see the associated amortization table.  

Using a mortgage calculator, you can easily compare your current mortgage to a 30 year mortgage at the current rates to have an estimate prior to getting the info from your mortgage broker.  

THe amortization table should be the first chapter one in any biggerpocket book.

This may not be relevant to the original question but worth explaining.

 what you need to do with amortization table is this, for example, I have the excel spreadsheet. This sheet can display the equity portion of the chart and also the remaining mortgage chart; if the excel sheet is good, you could also add another layer of chart if you add additional payment.
From there, you check at what month the cross between the equity and mortgage, in a typical 30YFRM, it would be at the 18th year usually (I may not be accurate on this), but if you add $200 a month, the cross could be on the 15th year (for example).

Now if you good enough with excel, you can add the 4th element of the chart, which is the appreciation forecast, I did it a lot. In here I forecast the appreciation (any guy that says appreciation can't be forecasted is simply don't understand anything about how an investment works). Overthere you add the appreciation into equity building. So you have home value-mortgage remaining+appreciation value. This chart will show you a new cross to the mortgage level. Usually at year 11-12.

This is where when leverage is utilized property, in a low-interest rate environment, I can pay off one 30YRFRM loan in less than 10 years without doing anything because I have one primary and one rental that appreciates at the same rate. So when you build equity in the other house, it literally pay off the other house's mortgage as well, while the mortgage in that home is paid by the renter.

That’s a very cool way of looking at this! I plan to start a table this weekend, so I’ll dive deeper into this message for that! Thank you!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Craig Janet:

I post all of my rentals on Zillow. If you pay the extra $29 for the premium listing it gives you some great data to analyze your property. For example it gives you a total amount of rentals in your market over the past 14 days. In my market the supply of rentals is increasing. This tells me that demand is low. I know this for a fact because I'm having trouble renting out my homes even after numerous price drops (I never had any problems before). 

It also gives you a chart of the average rental price over the past year. In my market the average rental prices has decreased all most 20% from last year. So you can look at this data and see if it matches what your PM is telling you.

This is helpful info, I’m going to get that option because yes you are correct- I want to make sure my PM is giving me accurate information!!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Carlos Ptriawan:
Quote from @Cody Thayer:

Good morning everyone. So I’ll start by saying that I messed up!! I live in Nashville, TN but I bought my first rental property in Memphis, TN a year and some months ago.

My mortgage loan officer recommended a 15-year loan. Being new to this, it sounded good at the time. Estimated rent at the time had me breaking even on the property each month, and I make fairly decent money so I didn’t need the cash flow. The way my MLO pitched it was “put this on a 15 year, since you don’t need the cash flow. That way you’ll have 100% equity in 15 years and you can then bring in 100% cash flow versus just a few hundred dollars.” 

Well, now rent at this property has somehow dropped drastically (from $1,350 a month to now $1,095 per month). The kicker is that my original tenant is out, and now my property management company still cannot get this thing rented… so I’ve paid my mortgage of $1,350 for the past 3 months. But even if it does get rented out at $1,095… I don’t know if it’s worth it. 

So my question is- do I sell this property (valued at $170k and I owe $120k on it), and 1031 exchange it into a new property on a 30-year? Or do I just eat the $300/month once it’s rented and hope that rent goes back up in a year or so?


If you need any other details I’m happy to give them


this is not too bad of problem, you can do 1031 because your the price of old and new house would be on the same trajectory price level. In 2023-2024 what's going on is we will have surplus inventory for housing esp in MF that's going to slowdown the demand for rent. If you can't find tenant, best you can do is you 1031 in different market but do your DD properly, do NOT believe 100% what realtor says, or you can do for temporary 1031 DST before 1031 again in the future with direct ownership.


 Thank you Carlos! I will definitely take your advice on due diligence. It seems that the acting effectively is better than acting quickly!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Dan H.:
Quote from @Cody Thayer:
Quote from @Bill B.:

@Cody Thayer

Check your amortization table. Even if you kick in the $350/mo you’re probably paying off more than that on your loan, so you are not “losing money” (once it’s rented.)

I had a property with a negative cashflow of almost $800/mo because I wanted a 15 year mortgage on an expensive (to me) property. It lowered th internet rate more than 1/2% and saved me more than $500/mo in interest. I was also paying off $2,600/mo in principle. So I was kicking in $800/mo and the tenant was kicking in $1,800/mo. With a 30 year mortgage it probably would have basically broke even on cashflow but I’d still have 20 years of payments left. Now that it’s paid off with rent increases it brings in $3,000/mo cashflow by itself. If you have a decent job cashflow of plus or minus $300/mo isn’t life changing. Getting enough paid off properties to stop working is. You haven’t made any bad choices yet. 

People have no problem dropping $1,000/mo in to their retirement accounts with no cashflow, this is your retirement account. 


 That is a really good point Bill! I will say this, and it’s going to sound very ignorant of me. There are a lot of tools out there that I think I’m missing, such as an amortization table. I don’t have any guidance from friends/family, which is fine, but I’m learning everything from asking questions like this. Do you have a good resource(s) for me to research and pull these tools/tables from? It would help me with the math and margins where I struggle with naturally lol 


 >Do you have a good resource(s) for me to research and pull these tools/tables from

Virtually every mortgage calculator will give access to the loan payment/amortization table. On my phone I have ZillowMortgage app that I can quickly run loan scenarios and see the associated amortization table.  

Using a mortgage calculator, you can easily compare your current mortgage to a 30 year mortgage at the current rates to have an estimate prior to getting the info from your mortgage broker.  


Just downloaded Zillow Mortgage Calculator Dan, thank you!!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Bill B.:

@Cody Thayer

If you have an android or iOS device I’m sure their App Store has a free one. Search amortization, or loan calc, or mortgage calc I know iOS has one. 

Otherwise you can google an online website based one. I assume you know what it means/shows, but if not. You enter the interest rate, the amount borrowed and the number of payments. It will first show the payment which is sometimes important, sometimes not. Then it will either show the break down of each payment or you’ll have to click on another button to show the “amortization table” this will show how much of each payment is interest and how much is principle paydown. 

So obviously only the interest is an expense, the rest is basically going in to your savings account (the property). You’ll see each month the interest is going down and the profit is going up. You can also make the loan one payment shorter by simply adding the principle portion of the next payment in line, you don’t need to add the entire payment amount. And then you have essentially saved the interest amount on that line. So you’ll see it’s a very good return on principle for the first half and slowly gets worse. 


 Good info Bill! I’ll look this up sir, thank you!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Max Fletcher:

@Cody Thayer

I like what it says in (rich dad poor dad), you should never buy an asset that you lose money every month. I personally would not hold a property that you lose money every month.

Another way to look at the situation is would you buy this property knowing that it loses a couple hundred dollars every month ? No you would not. I would sell it. 


I do love rich dad/poor dad! I’ve gotten a lot of good advice here on a few different routes to take, that I haven’t thought of OR that I basically got some verification on. I am working on putting together all of my options and seeing which makes the most sense here for me! Thank you Max!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Dave E.:

@Cody Thayer. Sorry this happened. The loan officer had good intentions (I think), but obviously doesn’t understand the investment side.

Have you looked into refinancing the loan? I know rates are up a bit, but if you get a new mortgage broker there are still some decent rates out there.

Best of luck to you!!

Hey Dave, thanks for the response! I am going to take all options into account. My interest rate currently is 2.99. Once I hear back from my MLO I will do some math there on refinancing and compare it to other routes!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Bill B.:

@Cody Thayer

Check your amortization table. Even if you kick in the $350/mo you’re probably paying off more than that on your loan, so you are not “losing money” (once it’s rented.)

I had a property with a negative cashflow of almost $800/mo because I wanted a 15 year mortgage on an expensive (to me) property. It lowered th internet rate more than 1/2% and saved me more than $500/mo in interest. I was also paying off $2,600/mo in principle. So I was kicking in $800/mo and the tenant was kicking in $1,800/mo. With a 30 year mortgage it probably would have basically broke even on cashflow but I’d still have 20 years of payments left. Now that it’s paid off with rent increases it brings in $3,000/mo cashflow by itself. If you have a decent job cashflow of plus or minus $300/mo isn’t life changing. Getting enough paid off properties to stop working is. You haven’t made any bad choices yet. 

People have no problem dropping $1,000/mo in to their retirement accounts with no cashflow, this is your retirement account. 


 That is a really good point Bill! I will say this, and it’s going to sound very ignorant of me. There are a lot of tools out there that I think I’m missing, such as an amortization table. I don’t have any guidance from friends/family, which is fine, but I’m learning everything from asking questions like this. Do you have a good resource(s) for me to research and pull these tools/tables from? It would help me with the math and margins where I struggle with naturally lol 

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Jay Hinrichs:
Quote from @Cody Thayer:
Quote from @Jay Hinrichs:
Quote from @Jonathan R McLaughlin:

Jay is right on. You might have some chance at the semester changeover in January if thats on schedule, at the very least getting someone shorter term in there to get on the academic cycle. Visiting faculty, grad students, semester exchange...work the college market in a big way.

Ok, so now I would definitely suck it up and do what you need to do to get on that Aug/Sept cycle. Certainly selling now selling from the position of biggest weakness. If you don't rent january try updating where its easy eat the vacancies and rent in prime time. If your PM didn't know why then they don't know the college market and you should get one who does. 


its like the Paul Harvey  " Rest of the Story"  LOL  if the OP would have led with Hey I have this property that has been rented to students and now its winter and vacant what do I do ??  instead U have all these replies from folks who just think its a standard rental etc.  So you get a wide variety of suggestions of which none are on the mark for what is actually happening or happened with the property.

First ever post here haha, what can I say? I’ll learn as time goes!


NP  its why I made that post.. this is very very common on BP.. where the OP does not give an accurate first post and responders just go into the Tulles
Haha I completely understand. I’m always looking to be more efficient, so this is awesome feedback! Thank you Jay!

Post: Failing property on 15-year mortgage

Cody ThayerPosted
  • Posts 42
  • Votes 24
Quote from @Jay Hinrichs:
Quote from @Jonathan R McLaughlin:

Jay is right on. You might have some chance at the semester changeover in January if thats on schedule, at the very least getting someone shorter term in there to get on the academic cycle. Visiting faculty, grad students, semester exchange...work the college market in a big way.

Ok, so now I would definitely suck it up and do what you need to do to get on that Aug/Sept cycle. Certainly selling now selling from the position of biggest weakness. If you don't rent january try updating where its easy eat the vacancies and rent in prime time. If your PM didn't know why then they don't know the college market and you should get one who does. 


its like the Paul Harvey  " Rest of the Story"  LOL  if the OP would have led with Hey I have this property that has been rented to students and now its winter and vacant what do I do ??  instead U have all these replies from folks who just think its a standard rental etc.  So you get a wide variety of suggestions of which none are on the mark for what is actually happening or happened with the property.

First ever post here haha, what can I say? I’ll learn as time goes!