All Forum Posts by: Cory Smith

@Jesse M. Check out a company called Max My Interest. Monthly, they check the interest rates at many separate companies, including ally and automatically transfer your money to the highest paying company, up to the FDIC limit.

I highly recommend you find and pay a trust attorney for an hour or two of their time. If you end up taking advice of someone that doesn’t know what they are taking about here then you have the potential to really screw things up and cost you a small fortune in the process. One quote I’ve found to be invaluable is “If you think it’s expensive to hire a professional, wait until you hire an amateur.”

Calvin Lipscomb many times over again! In my opinion, it is one of the best things a person can do for themselves.... just make sure the advisor is truly an advisor. There are too many salesmen that are hiding behind a title.

Keith, The issue with aiming for the “safe” 3% is that inflation has, historically, been roughly 3%. If you are saving the income, then over the long term you are breaking even; but if you are spending it then you are losing the same roughly 3% a year in spending power. In my day job I am an investment professional. My suggestion is to find a FEE-ONLY financial advisor and have them complete a financial plan for you. There are some/many around that will build a plan and not require you to invest with them. They charge a fee for building the plan. Yes, it may seem expensive. But imagine the cost of taking the advice of non-professional... If you need advice on what questions you should be asking potential advisors, feel free to PM me.

Judah, My recommendation is save, save, save. For option 1 all traditional lenders are going to want to see enough income to be able to afford the payments. Typically they will lend an amount equal to a monthly payment that is roughly 35% of your monthly pre-tax income. In your market, you generally are not going to be able to put anything less than 20% down and have it cash flow. As for hard money lenders, they typically require you to have skin in the game, especially when it’s your first investment. Some/many of them also only release funds after work has been completed. So you’ll need the down payment, money to start (and get at least halfway through) the renovations, and holding costs for the period through which renovations are taking place. I don’t want this to discourage you, but gettin a sound knowledge of some of your potential obstacles now will help you avoid frustration down the road. I’d recommend taking a job in the industry, any job to begin with. This will allow you to learn the ropes and potentially build our network while making an income. If you network enough, you’ll find a mentor that will show you the ropes. Good luck!

J., From what I’ve seen, I’m still a novice, is that you have two options. 1) Refinance to pull out the equity. 2) Keep looking for banks that will do the HELOC on investment properties. My two business partners were having the same trouble you are, and I kept pushing them to keep looking. They eventually found a local bank that was willing to loan up to 70% with a HELOC on investment properties; which is allowing us to continue our acquisition phase. I’d suggest trying local banks, they seem to be the most willing to work with investors. Just because two or three banks said no, doesn’t mean it’s not possible:

If you don’t want to sell it, then run the numbers on refinancing to a 30yr. You can always apply any surplus income, after you account for the other expenses, to the principal. It won’t pay off in 15, but it has the best opportunity for you to continue to profit from the appreciation and positive cash flow.

Since Brandon has mentioned rentometer a few times, perhaps a discount with them.