All Forum Posts by: Derek Luttrell

This may not apply to everyone, but for me, starting out young has helped. I'm 25, and my girlfriend of 4.5 years is 24. Up to this point in life, having roommates is all either of us have really known, so we don't mind continuing the trend for now. 

I own my 3 bedroom primary residence in the city, and the roommates pay 87% of all the monthly housing bills. Showing my girlfriend how drastic our monthly savings would be by having roommates really flipped a switch for her (before this, we were each paying $1000/month to rent downtown). I mapped out a timeline of when she would hit certain financial benchmarks through this expedited savings method, and that really excited her. 

Further down the line as we approach 30, I see myself in a similar boat as @Anthony Gayden in that my girlfriend will want to put her roommate days behind her. When that time comes, I too plan to compromise via live-in flip. 

I've only been out of school and in the workforce for three years, but I immediately started putting 10% of every post-tax paycheck into a Roth 401k, on top of which my company contributes 1.5%. This probably is neither the time nor place to debate Roth vs. Traditional, but I figure I am probably in a lower tax bracket now than I will be in 40 years, so I might as well pay those taxes now and withdraw tax-free at retirement. 

I educated myself a little and opted into two funds that aren't the company's default funds for all employees, and averaged together they are up 21.45% year to date. Do I expect that forever? Not in the slightest. Is it nice to see once in a while, and do I anticipate those returns in real estate? Yes and unfortunately not, respectively. 

My point is, I agree with @Brandon Brown in that I like the diversification that comes with focusing on both. I'm looking at real estate as a way to grow my wealth in my 30s, 40s, 50s, and my 401k as thick, sweet icing on the cake in my 60s and beyond. 

@Joel Florek is there a limit that you know of for the number of these lines of credit you can have? Is your goal to pay down that $50k credit line as quickly as possible, or have the tenants pay it down gradually with their rent payments, and get a different credit line for the next property (if that is even possible). 

@Scott Steffek in your experience, how is the rental market in NWI? I go through "The Region" (as we call it in Chicago) every time I visit family throughout Indiana, and I know people who are priced out of Chicago commute from NWI to work in the city for more affordability, but I wasn't sure if those people tend to buy, or rent. 

"I was told by the mortgage banker that there are rules in place where the closing cost fees cannot exceed a certain percentage of the loan amount"

Thank you @Vishal Didwania, that is new info that I hadn't known before. Good to keep in mind.

@Adrien C. I never really thought about NWI as a rental market, so thank you. I'll look into that area.

I also have to disagree on one thing--Exit 253 in Schererville has the biggest selection of restaurants in a one-mile stretch I have ever seen :) Living in Chicago but growing up in Fort Wayne, sometimes I miss all those unhealthy chain restaurants I used to think nothing of. 

@Joel Florek that is helpful and relatable information. If you can, keep us posted on what the appraisal comes in at, because like @Andrew Johnson mentioned, a low appraisal can kill a refi strategy. What are your rehab costs? Are you relying on this line of credit in order to fund your next deal? Also, what lender are you going through? 

@Scott Steffek I am looking at Anderson, IN. It's a 2/1 with detached garage with furnace, water heater, roof and electrical all having been updated in the past two years. The carpet has been torn up, and the interior all needs paint and new flooring, which I plan to complete with my girlfriend and her dad. 

@Andrew Johnson first off, this is probably as good a time as any to tell you I see you all over these forums, and I always appreciate it. I like hearing what you have to say, and there's a reason why you have as many "likes" as you do posts. Thank you for chiming in. 

Second, I'm not completely sold on the idea of refinancing, because I would then have a loan with interest on a property I once owned free and clear. I get that leverage can be a beautiful thing in REI, and call me old-fashioned, but I'm just not a fan of debt. I'm also not looking to flip this property, but $25k in built in sweat equity off the bat would be a nice touch. When people do a cash-out refi, is it always in amounts over $50k? I always see them advertised as methods to pay for kitchen remodels, pay off credit cards, etc, which I feel are things in the $10-20k range (or should be, at least).

I'm not necessarily relying on refinancing to fund my next deal after this (through a combination of house-hacking in Chicago and being able to routinely save $4-5k/month by doing pretty well at work), but it would be nice to see--and be prepared for--the day when I can build my portfolio with borrowed money vs. waiting until I have a new $20-30k saved up. 

@Account Closed my lender gave me a $50k minimum if were to finance an investment property, so I wasn't sure whether or not that minimum would also apply to a refi, or if those are viewed as two entirely different things. I could have asked them, but I usually get quicker, more diversified answers on BP :) 

I am looking in Anderson, IN. I was looking in Indy, but my price point was putting me in rocky neighborhoods. I grew up in Fort Wayne, IN and Anderson is a similar blue collar town with a higher renters : owners ratio. Where are you under contract? 

Hi Everyone, 

I'm in the works of buying a 2/1 SFR in suburban Indiana for $20k cash, with anticipated $10-15k in rehab, ARV of $65k.

Pretty much looking at a BRRRR method here, but my question is--is there a minimum dollar/loan amount required for the refi portion? Or, if I wanted to pull out just $20k to do an identical deal, would that be an option?

My question may be a little premature since I don't even have the property yet, but I'm playing chess with myself and trying to think ahead/map out my strategy and goals. 

Thanks for reading, 

- Derek