Originally posted by @Michael Lee:
Hello and thank you for your question! A HELOC card is one of the last ways to go when borrowing unless it has good terms and a responsible user. Remember that there is "good" debt that puts money in your pocket and "bad" debt that takes money out of your pocket. That iis one of the best ways to lookat loans. If you have good debt do not worry so much about the good debt and remember to be a long term thinker. In my opinion small house rentals is a bad way to go unless you are sure that you can keep it occupied. You are usually better off with multiple unit complexes that are large enough to budget for a property manager and not have to manage it yourself and that allows you more time to be income productive and less stress than stressed to be responsible to tenants.
As long as you have debt is providing positive cash flow is desirable and that is more important than having debt. I have been listening to a pretty knowledgable man lately who you might know and his name is Grant Cardone that owns about 4,000 units and he has had some bad experience with SFH.s and talks down about them because they have either 0 to 100% occupancy with nothing in-between. With apartments you can have some vacancy and still having enough tenants paying rent woo you can still make your mortgage payments without taking part or all of it out of your pocket. You would rather have more units at one location than having multiple locations when buying 1 unit at at time.
It usually does not takea the same amount of labor to take care of 40 units as it does to take care of 4. Yes, the tenants in apartments tend to bo less responsible and that is why you want to hire a property manager or a property manage T company with plenty of experience which zooms you to append more time on income productive things. Of couse, your goals and intent make a big difference on how we reply so keep that in mind when you respond. I am 60 years old and I am actually from and raised in Dallas so I might seem a little biased but I want you to do whatever makes you happy.
There are many things I do not know about you so that makes my comments more dramatic depending on what your goals are. If you use a HELOC "Loan" you must know it's terms and conditions are and be responsible to take care of it the best you can and know if it is secured by anything. I am curious about where your rental property is and is it in a good demand area? Just remember that there is good debt and bad debt and try to keep you in that good side. Remember to be long term thinking when it comes to rental properties and the alternatives available to you. There are many personal and business things I could tell you but try to make your decisions. With the what the future may hold and try to be ready for it.
Try to keep control of all the things you are resposible for and only hand part of it to people you trust. Do not assume on anything that is suppose to happen. Track all of your income and expenses in report form and regularly review them with people you trust and understand your goals. Speaking of goals, review them everyday to help keep you on the right path. Concentrate on saving as much income as you can. Do not try to do everything yourself. Develop systems and do not be afraid of hiring other people, they might know something that you do not. Do not believe the title of the people you hire and do not turn them loose until they have proved them self to you. Having written systems should help you in the future of possibly hiring others to do the things you do not like or struggle with.
Good luck to you!p
Thank you so much. I would love to talk to you more. You sound like you have seen and done a few things I could learn from. My property is in a good area in Garland Texas and over the last 10 years has had 3 tenants family's. All took very good care. It does have a pool with I DONT LIKE for a rental. I have a CPA that specializes in business and good with real estate. I have a contract attorney. I have had LLC's in the past, none now but will be registering soon.
I am for sure going to focus on multi family. The only reason I didn't before to be honest was courage. BP has been so great and the responses I've received from my first forum question have been great! I love what you said about vacancy. I plan to use management for any property I purchase. I also want to learn "truly learn" about management expenses. I was offered a sit-down with a local management company yesterday just to talk. I want every horror story they have.
I will look up Grant Cardone. Thank you so much.
