All Forum Posts by: David Janash

Hi All, question for ya,
I closed on a REI property in Scottsdale AZ in October 2012 and it has been rented for 3 years - DONE!
I bought the place from a distressed seller, who was originally asking 975K, I got it for 850K. I have also put money into the home. I am hoping it's now worth 1.1MM maybe even 1.2MM.

I have 2 notes on it for 680K or so. Can I pull my money out so soon? I would do so and buy a place in NYC where I live and use it to put on my down payment for my Personal Residence, between 1.8 and 2.1 in Manhattan

Some questions,

will a mortgage company look past the fact that the 400K check is tied to the AZ house.
Is It to soon?
Should I have the place re-appraised?
Thankfully my personal income and savings will pay for the rest of the closing costs and monthly.

Any suggestions

I am not new to the city area but new to REI outside of NYC, PM me to discuss some ideas and goals. I am looking to increase the size of my RE portfolio with cash and am looking for brokers and wholesalers at this point to finish a deal in the year 2013. I think my issue has been inventory, maybe it was the broker I was using, who knows? It's been a bit frustrating but I am not giving up.

I bought a REI house 6 months ago with combination of 2 loans. A conventional mortgage for 400K and a 2nd LOC to avoid higher jumbo rates and give me some financial flexibility and now plan on buying another. I know my ability to borrow is related to my total indebtedness and I was pleasantly surprised to see that a recent pull of my credit on MyFico.com did NOT show the LOC..Is this normal? a good thing? or is is MyFico is not a "real" credit pull.

Don't a ton of people who buy property do that?
How do you avoid having an issue or "gettnig caught"

you raise a good point, then should i call the mortgage people and change this property classification to an investment property? I checked 2nd/Vacation home with the future and present intentions clearly communicated to the mortgage broker.

Thanks

I'm actually 35 and have a substantial income. I'd like to retire at 50, or at least slow down, and do the managing of RE and other buzz ventures in AZ at that time. For now my job requires me to be in NY all the time and it somewhat physically demanding. I'd like to hire a property manager to do it all for me if I can later as well. For now, the others have been spot on, after potential repairs and improvements I can walk away with little to no cash flow. If the apartment was vacant for 6-12 months, it wouldn't be a huge deal and I would spend a lot of time out there during the colder months, but it would defeat the purpose a bit. I guess I am not really investing with this house as most people on here would or should. It's a personal goal and the tenants just buying me time, not making me money.

i would like to parlay gains from appreciation or additional investment income into something real in AZ though, and while I'm making good money and am healthy and able I'd like to jump in 10 toes.

Should my first step be to find a wholesaler or MF property?

I have no business in RE, but when I found a home in AZ that was in the right area and for the right price, I decided to buy it and rent it out till I retire, or sell it since the market was a buzz at the time.

Here are the details.
Asking was 975K
Purchased for 850K
Previous owner was allowed to live there for 3 months at 3K each month after he agreed to fix up 20K worth of repairs and improvements. He was a nice guy and I wouldn't let 9k let the deal slip away from me

I put in $0 in improvements as the home is only 4 years old and amazing in every way I could ever want.
But I did invest 170K plus CC and own 20%

I ended up renting it out for $4600 to an exec at a large corp in the area with a 3 year lease (great for me as I may want to move there in 7-10 years) , my PITI payment is around $3750.

So after some other minor expenses, I'm cash positive but my ROI will be low and slow and instead of appreciation being icing on the cake, it's really the cake, period.

What should I do different if buying a SFH again, Ive learned about the 2%, 50% and 70% rule too late, but it doesn't change how much I love the house which I will eventually move into.

FWIW, my income is such that 1K or so in cash flow a month is negligible and but 3K-8K more per month when I retire will be great. I just to make sure I set myself up for that.

Thanks everyone!

Will a HELOC or HELoan I take out on the property after it is off my tax returns show up on my personal credit too or is the LLC with its own TIN get this on its own Balance sheet?

Im trying to figure out if thats how people sometimes get a second investment property.

Just to clarify to get the 43% they divide total monthly obligations by total monthly after tax income right? That must equal .43 or less correct?
I'm so happy the closing was in Late 2012, that means in 14 months time it will be on 2 tax returns. :)

This has been incredibly helpful!!!

This also answered another question I had
Should I buy my personal home first (currently renting...long story) or continue investing.

Seems like DTI ratio will rear its ugly head.

Thanks a ton again!

Thank you so much for your replies. I guess the real reason I started the topic was then, to ask...

How the heck do people accumulate multiple SFH for rental income properties? Lets hypothetically say the down payments each time are not an issue, would that alone be the limiting factor?

The second home in reality is 1/3 the price... But do people like me with 1 property attempting to accumulate a nice portfolio EVER make it or is this happening with a private (non Bank) loan in most cases...

I'm 35 and would like to buy a property every year or two with investment income and rent and hold till 47-50 and then graduate to and collect rent from a small apartment building or MultiUnit with any proceeds and gains.

Any advice?
Will banks give me convention loans till infinite if I can provide 205 down each time?