All Forum Posts by: David Lorenz

Hey Mitch,

I have not personally invested in land, but I would recommend you check out @Jonathan Greene podcast ‘Zen and the art of Real Estate Investing’. The latest episode, I believe 44 was all about investing in land. It’s worth a listen

 I would check your numbers before moving forward with this deal. I personally don’t know you’re market, but I’m not seeing how this deal is going to be profitable. Even if you choose to self-manage which could save you 8+ %, you’re still not accounting for the vacancy, capex, and repairs which could easily total 20% of the monthly gross rent. I totally get you want to go under contract and get your first investment property, but don’t look past the math.

Just be sure you have an exit strategy (I.E. refinance). I would reach out to your lender to be confident you’ll qualify for a refinance when the time comes before buying the property with hard money.

Most lenders are going to be capped at a certain LTV as to what they'll lend for a HELOC. Typically I've seen around 80% on primary, but it would depend on the lender. That means there's already going to be a sizable buffer in there should the market take a downturn. As far as costs go they can vary, but refi's are not cheap. The good news is you can typically roll your closing costs into your mortgage and pay less out of pocket.

@Trevor Lowe

Is it feasible to combine your heloc and savings and simply purchase in cash? If so, you avoid paying costly closing costs twice, especially if you’re planning on refinancing after only 6 months.

@Afia Amponsah I would say it all depends what your end goal is. Personally I would not refi the duplex. Your going to be hard-pressed to find a much better rate than what you're already paying at 3%. Yes, it would be nice to have a lower payment, but you also have very little money in the deal with only having a 5% down (Im assuming it wasn't a major rehab considering you went FHA). I would leave it alone, and consider either getting a heloc on your townhouse that's already paid off or doing a cash out refi on it to pull money out to buy the next one (assuming you want to scale).

@Andrew Bowden Sounds good! Always looking to connect with other local investors. Shoot me a DM and we can try to get something on the books.

@Andrew Bowden Welcome to BP! I’m also located in the Philly suburbs and have been investing in RE for the last few years. Feel free to reach out if I can be of any help to you!

I'm also a big fan of the HELOC. They cost very little to setup and you typically pay nothing until you tap into them. With the numbers you stated you could have a couple hundred thousand available depending on LTV. Start with the local banks and credit unions. My local credit union will go up to 90% LTV on a primary residence. At 90% of 400k minus your debt of $150k, you could potentially have $210k at your disposal.

Check out Never Split The Difference by Chris Voss. It’s on my to-read list. Heard a lot of good things about it.