All Forum Posts by: Eric Schultz

@Katie Esmay

Assuming you have a strong credit score, there are several lenders (banks, credit unions) offering low 1-year (recent rate 1.70%) up to 3-year (recent rate 2.74%) fixed rate options as promo rates on a HELOC product. So, if you can lock in a rate for a known timeframe, you can protect your downside and just pay the monthly interest. The rate just turns variable after the fixed period. Something to consider...

@Kaylee Walterbach

Discovering where I can add value and then teaming up with those who have already done it.

Don’t go into the dark cave alone. Take someone with you who has already been there before!

@Keeshaun King

Local property management companies and investor friendly real estate agents should be able to help with this market specific data as well.

@Amanda Gisonni

Try Pen Fed Credit Union.

Pen Fed dot org

@Tim Lounibos

It sounds as if the current stimulus package will benefit a majority of the middle class until at least Sept 2021. If things still around looking great, more stimulus (aka helicopter money) will likely be pumped into circulation.

While interest rates are a record low, housing demand will still remain high in most markets.

If using the BRRRR strategy, just make sure you have a good handle on your rehab costs, ARV and at least a couple lenders lined up.

Personally, I’d use the leverage now and potentially get a larger property or multiple properties during that same seasoning period.

You might be surprised that there is still juice left in the market for appreciation. If not, at least you did solid underwriting and the positive cashflow on more properties will carry your thru a dip.

@Minna Reid

Ken is the real deal as others have said. I first learned of the infinite returns model from him years ago. Super smart guy, and I know some of his investors personally that he has made a lot of money for.

Bottom line is, whether this time the data supports a significant correction or the monetary and fiscal policies are manipulated yet again to avoid / push off a crash, the only thing that matters is that you have strong reserves and are cashflowing to weather the storm!

@Dan Heuschele

I think you bring some good value to this discussion on the appreciation factor of a coastal market like San Diego. Should you solely plan on appreciation to make your investment decision, probably not.

But, I truly believe that anybody that plans to live in San Diego for the long term will be deeply disappointed in themselves if they don’t get some of their capital invested in San Diego real estate especially if it can be done as way of a house hack.

I certainly will not look back a decade from now and wish I had purchased more real estate in a low cost of living Midwest town over the chance of buying into a great neighborhood in San Diego, especially with having the benefit of local knowledge. For example, I've experienced over 3.5x my original 20% down payment in appreciation alone on a San Diego SFR since 2014. Even if there is a 10% correction before I'd sell some day say in a decade from now, I will still be multiple six figures ahead of the cashflow generated on a B-class 10-unit property in the Midwest over that same timeframe with tax benefits aside. When you take that big chunk of dead equity in that San Diego SFR and put it to work on generating more positive cashflowing assets, you get the best of both worlds.

I do own rental properties in the Midwest to be able to make this comparison, and those properties serve a much different purpose in the wealth building game plan.

@Vidal Preciado

Unless you have trustworthy boots on the ground in an out-of-state market already (broker, PM, inspector, rehab contractor, etc.), I'd at least look into the 3.5% down FHA loan on a house hack opportunity in San Diego County.

Assuming you have a solid credit score, you will get in at a record low 30-year fixed rate. Not sure of the exact FHA rules on pre-paying the PMI at closing, but this could be an option for you as well.

Let a little time go buy. Maybe fix up the property some to increase market rent and appraisal value. Then look into getting a HELOC on this property. Many HELOC products come with a promotional 1-year to 3-year low fixed rate option right now (turns variable rate after that timeframe on any remaining balance). Rates should be low for the next few years. Even the Fed has gone on record in 2020 stating this.

Use those HELOC funds to make that down payment on an out-of-state property. By then, you should have your out-of-state team on board in one or two solid markets.

Nothing against out-of-state turnkey providers, as I have used one before and had favorable results, but you might find yourself on a waitlist in the markets worth investing in.

Good luck!

@Pat Goodyear

What was your anticipated exit strategy when you first started building your RE portfolio before life got a little more complicated with kids and a second job? Maybe revisit that to see where your true motivation lives. Do you want to be mostly passive by W2 retirement or do you still enjoy some of the “hands on” active approach with your RE investing?

Do you plan to help your kids with their college expenses some day? Maybe this RE portfolio has greater purpose in 5-10 years versus just the monthly cashflow it may bring in today?

I ask this because if you were to 1031 into a one or two larger multi properties, you may loose the ability to sell off a paid off single family or duplex rental property to pay for your kid’s college expenses. You could package up and sell off properties to other investors and place your funds into some passive syndication deals (accredited investor status may be required), and in doing so you would get a lot of your free time back, less headaches but also lose that control that you currently have. Most of these syndication deals are 3-7 year proformas by the way.

I don’t have a direct answer for you on how to find good laborer help in your market other than what has already been mentioned, but thought I would throw some questions your way to consider.

Good luck!

@Jaideep Balekar

Inspired!

Thanks for all the great detail.

Best of luck to your future growth!