All Forum Posts by: Dan Shulda

Based on a recent experience, I would reach out to your insurance company and find out if, worse case, the dog bites or causes harm to someone on the property, if it would be covered.  In my case it was not.  To mitigate this, I put in the lease agreement that the renters had to provide additional insurance of coverage if the dog did something unfortunate.

Hello BP family, need some help, guidance, input; 

I purchased my first rental property using my HELOC that allowed me to buy the home outright, same as cash. Now I want to start working toward the purchase of my 2nd rental property but have some questions. I have about $50k left on my HELOC, and I have the property that I may be able to leverage, but I am trying to find the pro's and con's of using the full $50k as a down, getting a mortgage, or trying to leverage the equity in my 1st property.

Any guidance would be helpful.  I am trying to cap my next purchase at about $300k with a monthly return of ~$400 (have not found a place as I want to make sure my financial plan is solid before moving forward.

Thank you in advance

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $250,000
Cash invested: $250,000

Took equity out of my California home as I am a long term resident in California and feel confident in the market

What made you interested in investing in this type of deal?

Been looking for a single family property, where my HELOC monthly payback would be less than what I could get for rent. Challenge was that there is a 10 year pay down period in a HELOC, then you can refinance up to 20 years (mortgage)

How did you find this deal and how did you negotiate it?

Found an agent, via Dave Ramsey, who lives and works in the area. He had a good rapport with the listing agent. Did not get the greatest deal, but it met my criteria

How did you finance this deal?

HELOC

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Jason Muse, Real Estate agent out of Cypress TX

@Greg Scott I ran the numbers, to the best of my ability that showed that a HELOC was better than a mortgage. However, I do not believe my models included any tax returns. If you or anyone have a good resource or calculator on this, I would greatly appreciate it (hope I didn't break any rules with that statement) In the past written off all of the HELOC interest, but that was typically what I had used for upgrades and repairs on my primary residence.

Hello @Susan Snodgrass,

Am/was currently in your situation, I had about $755k equity in my home.  No other debt, so I am taking a chance and buying a rental property in Texas.  I am paying cash for the home, and current rental model shows about a 6% return.  Very nervous as I do not want to lose any money on this deal, so have proceeded very cautiously.  Would love to hear an update from you after you make a move.

BTW - I am currently planning on doing the same thing in April of 2022.

Best of luck.

Dan

Hello all, just a quick introduction. New to real estate investments. Closing a deal in suburbs of Texas. Took out HELOC from my home in California and was able to pay cash for a home in Houston. Maybe not the best approach, but would like everyone's feedback. Thinking of doing the same cycle again in April of 2022.

Dan