All Forum Posts by: Curtis C.

Ned Carey I am not following you Ned, would you mind elaborating? Thanks

Theresa, thanks again for you reply. I just checked their website actually and looks like my local credit unions offer them. I will just have to meet with them and discuss the terms, perhaps shop around and see what everyone else is willing to do as well.

Thats a great point Theresa. I don't use a big bank, I use a local credit union. I will have to investigate and see what they have to say about this.

Thanks Gene, yes of course. I work full time still and venturing into real estate on the side right now. My Credit last time I checked is well over 750 and my income is fairly good, and I have no loans at all, everything is paid off, even my own house.

Other than what you pointed out does this HELOC plan sound good, assuming I qualify? What might be some draw backs to such a plan?

I am looking to acquire my first rental property. I often read how people leverage their money with hard money or private money. I am very conservative, and like to keep my debt ratio as low as possible, and as such tend to shy away from hard money loan products.

What I was considering, is perhaps buying my first rental property with cash money, and then leveraging my money with a HELOC. And keep the cycle continuing, effectively growing my initial pile of money.

I only pick up properties that need work, even if its just a light cosmetic job or a hoarder house and everything is otherwise structurally sound. Once I buy the property, rehab it, and have a tenant in place I will pull a HELOC out to acquire my next property. That way im leveraging my money, with a cheap 4% interest rate. I work with some investors here in DFW that can acquire houses at 55-65% arv minus repairs. So im effectivly using cash to buy a property at say 65,000 and its worth 100,000. I just traded 65k for 100k, and then im going to pull a heloc out on that 100k. I just created 35k in equity plus cash from the tenant and have a heloc at a cheap rate to pick up another one.

Does this sound like a good approach? Thank you very much for your help everyone, I really have learned alot during my short time here.

Just a few basic questions:

1. When you sell a owner financed house, technically, by law your supposed to pay taxes on it. You just sold that house thats worth 120k. But you only put 75k total into it. As far as the government is concerned you just made that full 120k and they are going to try and tax you on it. How do you prevent this from happening?

2. Is there a right of redemption period if you have to foreclose on someone?

Also please add in any additional pitfalls to owner financing a house I might not be aware of.

Thanks

David Beard Thats a great point David, I was actually unaware of the two year rule. Thats actually quite significant for me at this point in time. My DTI is decent, but adding a rental property or two might break that.

Perhaps I should start off with some owner financed properties, and pick them up with cash?

Bryan Hancock Thanks Bryan that looks like a great tool. I got around 3.75% to 4% in my area, that sounds reasonable to me. Would you say that tool has been pretty accurate for your area in Austin>

James Martin Thanks for your insightful comments. Do you know where I might find out what the current rates are for investment properties in my area?

Hello Everyone,

I am in the process of educating myself before I purchase my first few rental properties. I have heard that the mortgage rates for a 15 or 30 year loan are a little bit higher than if you were to get a mortgage on a primary residence. For instance primary residence mortgage 30 year might be 3.5% but for a 30 year on a rental might be 4%.

Is this true? If so where can I find out what rental mortgage interest rates are in my area? I tried checking some bank sites online but didnt see anything about interest rates for rental or investment properties.