All Forum Posts by: Daniel Rutledge

I assume banks see a HELOC on a rental as being too risky Vs a Primary.

Most banks will only lend on properties where the mortgage will be 50k or more so you may want to speak with a lender first. Also, if you are rehabbing the properties you can also buy with hard money and then refinance with a 30yr after 6 months in most cases. This might allow you to have less money tied up in each deal. There are those that want as little of their own money tied up as possible and those like yourself that want a more conservative approach. A bank will likely want 3-6 months of reserves yes and for you personally to decide on what else you want to hold in reserves only you can answer that. Run a worst case scenario for properties sitting vacant and having additional repairs and decide what you think it would take to keep you going during that time. Best of luck!

Originally posted by @Cj Thompson:

@ Daniel Rutledge

I would buy these I assume with a %20 down bank loan.

The reserve im talking about is just to be prepared for the worst. So I know u want to have 6 months of PITI but then the rest would be in case of major repairs needed I.E. roof, furnace, sewar pipe.

I tend to be conservative and I like to have reserves or emergency funds. I'm not even too crazy about debt in general. I lissen to a lot of dave Ramsey. 

I guess I'm trying to figure out what's a reasonable amount for my first property and also for the 2nd, 3rd, etc. assuming by that time I'd have collected rents and set aside 20% for repairs and capex. 

How did you calculate that you need 10k in reserves for a 50k property? Are you buying these properties with cash, hard money or some other way? Are you wanting to know what a lender wants to see in reserves or just what others feel is a good strategy? I am sure there are some lenders that will chime in since I used the words lender and hard money in this post lol.

Redfin has my primary home listed pretty darn close to the actual value which is 30k more than what Realtor.com has it at.

I am interested in the answer to this question as I am in the same area and have not found a HELCO on investment properties as of yet.

I have just paid off some credit cards and as soon as that shows on my credit report I am working with Fund and Grow. I will post my experience on here as it is part of a larger plan I have put together for the next three years.

With this being your first and not using a property manager I am interested to know what type of interview and checks you did on this tenant. Did you check her rental history along with general background and credit checks? Personally I do not have time to self manage so a good property manager is worth their weight in gold if they are able to place a tenant that takes care of my properties. Were you clear with the tenant on what she was responsible for and what things are worthy of a maintenance request?

Why does the seller want an all cash deal? Will you have the credit to refinance the property and can you afford the hard money for 6 months?

Thanks for yoyr reply. I will plan things out with my lender so i feel safe with how much i take on. I will likely do a few flips also to build capital along the way.

How many hard money loans do you feel safe having at the same time? It seems that using hard money to quickly close on a property along with avoiding high down payments is a good option. If buying right the homes can be refinanced with very little out of pocket. I am intetested to know how many hard money loans others feel safe with having at one time. Has anyone had issues when trying to refinance and was stuck holding the hard money longer than expected?