All Forum Posts by: Edward B.

@Joy James, no issue going to one or more agents to hear their listing presentation. That's just good business. As mentioned, though, it is about much more than the listing price which can be used to manipulate. They should be showing you the comps and justifying their recommendation. You have to decide if they are making sense or blowing smoke.

@Carlin Barney, someone who is going to help me make money without wasting a lot of my time. 

Bringing a deal is certainly valuable, but 50/50? Maybe, maybe not. If I'm funding the whole thing (i.e. taking all the risk) working the whole deal (i.e. leveraging my knowledge and experience) and teaching you along the way (i.e. working for free) then what are you doing to earn your 50%? If I am in need of a deal then maybe, or if it is a screaming good deal which rookies rarely actually have, OK. But bottom line is you need to bring exceptional value because if I don't need the deal then I don't really need you.

I don't want to sound too harsh, but there are a ton of people looking for mentors that are really just looking for free education and honestly will probably never do anything with it.

@Eric H., I would do it if I thought I could get the money out of the rental again if needed. You could always refinance it or get a line of credit secured by the rental. I hate having equity sitting idle in a property, though, I'm sure others would disagree. It certainly is riskier putting your house on the line, but to me it is a simple numbers game. You are borrowing the money at 2.875% and investing it into the rental property. So what is your return on the rental? Does it make sense? Could you do better elsewhere?

@Brad Fletcher, normally I would 100% agree with @Joseph Firmin on the HELOC vs cash out, although not necessarily on a first position HELOC. However, they are practically giving money away right now. If you can cash out at less than 3% fixed, that is awfully hard to turn down. You could throw it into a HYSA while you are looking and only pay 2% on it. However, if you aren't going to do anything with it than even paying 2% doesn't make sense.

It's hard to give a good breakdown or sample scenario without knowing the specific numbers and situation you are working with. WAY to many variables. I would say that a HELOC is better if you are going to use the money over and over again, a la flips or BRRRR. That makes it more than worth the interest rate risk and higher interest rate. However, if you are just going to park the money into a single property then I would lock in the lower rate...depending on a variety of other factors. With the HELOC your payment is only going to go up.

@Cesar Ramirez-Fajardo, I just moved from that area 3 years ago and there is a lot of opportunity to house hack. I concur that it is a great way to get started investing in real estate. Yes a four plex or even duplex or triplex is probably better in the long run, but they are harder to find as well. You can totally start with a SFH, I did for my first several house hacks, and rent out the rooms while you are there and then the house when you PCS. Just make sure the numbers work as if it were a rental now.

I'd reach out to a Realtor now and tell them what you are interested in so they can help you pick a location and start sending you what's available. That will give you a lot of properties to analyze for their investment potential and give you a more realistic idea of what your options will be.

@Luis Serrano, Gonna be tough to work this one from a wholesalers perspective. If you were buying the property outright you'd be in a better position. I'd probably start by calling the broker or having my attorney call the broker and make sure they know there is a contract on the property already. Feel them out, see what they say. Might be they know you aren't licensed and are going to look to take advantage of that. You could always sue for specific performance, but from what I understand it's rarely worth it, even for a more clear cut deal. 

I wouldn't line up a buyer unless you are a lot more certain you can perform. No investor I know is going to want to walk into the middle of this unless it is a screaming good deal and you have a really good case.

@Dennis Soto, you really need an accountant that specializes in real estate and understands your tax situation to make a specific recommendations for you. However, in general house flipping is considered earned income, not passive income, so you have to pay FICA and Medicare taxes on it. You can shield yourself from some of those by using an S-Corp. 

@Daniella Steinberg, I'm not sure what you are struggling with either. You are correct, there are many many threads addressing this question and I don't think any of them recommend using an S-Corp to hold rental property. What exactly are you struggling with?

@Stephanie Gothart, you don't have to be heartless to be a property manager...but it helps. Seriously, you have to recognize that this is an extremely bad sign. This lady will be pushing the limits the entire time she is a tenant. Personally, I would just move on, then you can have the moral high ground when she claims how heartless you are, but you are probably entitled to enforce your contract. I'm impressed you've never had a tenant like this in 13 years. Don't let this one be the first.

@Jordan Stallard, it's hard to say without knowing what type of deals are available to you. But yes, I'm advocating making sure that you can pay off the HELOC and use it over and over again. Whether that is only investing small amounts that you can quickly pay off (not sure what type of deals these may be) or through forced appreciation such as in a BRRRR or a flip. Otherwise, once you invest the money you will be done until you can save up enough money for another down payment.