All Forum Posts by: Daniel Rutledge

Seeking advice on a possible Owner Finance deal from another investor. Both of these homes are on Zillow with a bit of information and from what I can see there are pros and cons with the deal. Pro: 8k as a down payment is attractive and having a deal outside of the credit system is also attractive. Also, if the deal is cash flow positive right off that is a plus. Cons: Total cost of the two homes is likely more than the actual value. I also do not know what the cost of repairs are on the second home. I do not know the quality of the tenants. The area is a mill hill on the "bad" side of town. There will be zero to little appreciation in these properties. Below is the information from the seller and I would love some input from all sides. Thanks

2 Homes for sale with owner financing available.
$100,000 owner financed
8% down - $8,000
Payment - $875 a month includes taxes and insurance
Net Monthly Income $475
Net Annual Income $5700
Cap Rate 5.7%
Cash on Cash Return 71.25%

410 Hudgens St. Anderson, SC
3 bed 1 bath, recently renovated, rent $800 a month.
Taxes $1,395
Lease is up Feb. 2019

703 Posey St. Anderson, SC
3 bed 2 bath, needs a little work but is rented currently for $550 a month.
Rent should be $700
Taxes $579
Lease is month to month, tenant has paid on time for 3 years.

If the car is holding things back I would sell the car. If you had the opportunity to buy either a car or cash flowing rental which would you choose. If you have another car to drive i would sell it this week. You can always buy another car layer on.

Hi all!

I am wondering what banks offer a HELOC on a primary home at a 90% LTV. I have forced appreciation on my home and would like to take a HELOC to invest on another property but to make the numbers work I need it to be at 90% LTV. I live in the upstate SC.

If you are being told that your debt to income ratio is too high and you only have a primary home and car notes then you have one of two potential issues/solutions. Either you bought too much home and have large car notes or your income level isn't high enough. Without knowing your exact finances I would suggest dropping a car loan and look for ways to gain additional income. How far off are you to being able to invest? What is your debt to income ratio currently prior to gaining additional properties.

I live in the area but am new to the game as well. Not sure I would be able to assist.

The ADA specifications for service dogs are very specific in that the animal must help with a physical disability and perform a task such as opening a door or picking something up. Emotional assistance is not recognized under ADA guidelines. I would check their website out for specific qualifications. AND YES you can ask what action the animal performs to assist with a disability.

In my opinion if you are planning to use real estate as income and for long term financial planning I would hold off on the 401k. If you are trying to save for an investment and or paying off personal debts then make that your focus. Once you have traction and are on pace I would consider a 401k. Keep in mind that Scott is sharing an approach for how you can retire early, say in your 30s. Me personally I would rather have enough rental income to retire now Vs sinking money into something I can't touch for many years to come. Definitely a Rich Dad Poor Dad decision.

Originally posted by @Robert Lubell:

Daniel, I have worked with homeowner's for the last 7 years setting them up with solar through loans such as Mosaic and others that allow you to either apply your solar tax incentive to the loan or to keep it for something else. I've always mentioned to solar buyers that if they have other debts with higher interest than their solar loan, that they should apply the incentives to those debts... or use it to invest just like you are saying. Definitely a great strategy. 

The only downside to consider, is that MANY of these solar loans secretly include "dealer fees" that the bank charges to the solar company that you are working with, and so of course these fees are baked into your solar purchase. Basically, your solar gross cost will be about 10-20% higher from your solar company by using loans like Mosaic as compared to secured methods such as using a refi, heloc, etc which would be considered cash deals to your solar company. The upside to this downside is the higher the price of the solar (including these loan fees), the greater the tax incentives are!

Again, overall as long as the tax appetite is there, I think its a creative and great strategy. Thanks for sharing!

What has been your experience on how much appreciation a homeowner will see from a solar install? I plan on getting an appraisal done afterwards and if able I will do a HELOC to invest in other properties as well. This us assuming I can get a higher appraisal from having solar.

Very volatile and possibly in a bubble. If it tanks it will be a bad one. For the long run I would avoid any type of currency other than gold.

Thanks for all the replies. For my area it may seem reasonable to do both at the same time. The comparison above was for a few dw that were newer and very clean in larger lots in established neighborhoods. I could do them cheaper as a reno in a less desirable area.