All Forum Posts by: Eric Schultz

@Kevin Lanphear

Alright, glad to see there are a lot of people familiar with BlockFi already. Definitely merit to that advice.

Here’s another approach.

Assuming you have a strong credit score, why not take a HELOC out on one or all three of those rental properties once you have some equity beyond the 20% mark? (Yes, there are lenders starting to offer rental property HELOCs now). If you own a primary residence with greater than say 25% equity, maybe HELOC that first. Then use the the velocity banking method with the combination of your HELOC(s) and monthly rental income cashflow. The interest only charges on HELOCs right now are basically at the rate of inflation. In some cases, you can even lock at a 1.75% fixed rate for a year or sub 2.75% fixed rate for 3 years. With the fixed rate locks, your short term downside is protected. Then go acquire more positive cashflowing assets with those lump sum HELOC funds, use the growing monthly cashflow to payback the HELOCs every month via velocity banking method.

With this method you have put that dead equity in your properties to work, and have monthly purpose for that $1,500 / month cashflow to grow your portfolio much faster than just saving the $1,500 / month for the next down payment.

@Sam P.

Great DIY advice shared so far, but if you are looking to scale, then I would agree with the recommendation on finding that professional property manager for your team and let them handle it. The timeless advice remains that we should underwrite our deals with the property manager cost, whether we do it ourselves or hire it out.

@Aaron Duplex

Just managing the manager here on B class properties. Couple recent renewals. No missed rent payments in 2020. Still trying to figure out why this real estate thing hasn’t caught on to the general population yet. Those W2 job retirement plans are still too good to be true I guess.

@Jason Young

I totally get the desire to own a mortgage free property, but if you are in growth phase right now into retirement, you could do much better with leveraged double digit returns on multiple properties. Keep in mind that with the same available capital, you may be able to essentially pay no taxes on the rental income over the next two decades, enjoy the appreciation of multiple properties at the same time, all while the tenants pay down those mortgage balances for you.

While the debt paydown and appreciation build your equity positions in these properties, you can then look to put that equity to work for you via HELOCs or cash out refi’s.

Bottom line:

Equity locked up in a property has zero return.

It’s nice to have options though, right?

@Tri Le

Have you narrowed focus to a specific market?

Do you have a team of contacts in place (e.g. mentor, CRE broker, RE attorney, lenders, property manager, contractors for rehab / maintenance, etc.) ?

You can always add some of these team members after making offers, but it will sure help secure more results with some of these team members already in place.

@Tyler D.

I think most buy-n-hold folks will be pretty happy with the value of their properties in San Diego 30 years from now.

Note: definitely not referring to a cashflow play here, but six figure HELOCs on coastal properties definitely can help buy positive cashflowing properties back where I’m from in the Midwest.

@Misael Carlos Vera

Real estate investing is a process like many other ventures. You have to learn to enjoy the process to some degree. A strong “why” combined with continued education and networking with the right group of people will help grow your knowledge & motivation to get involved. Then from there, it takes discipline and persistence to build those results you are looking for.

@Adam Tafel

My lender’s forbearance program is requesting proof of loss of income, bank account balances, retirement account balances, other investment balances. Proof of loss of income could simply be my monthly owner’s statement from my property manager; however, if I show strong cash reserves in the other requested documentation there is risk for denial on the forbearance program benefits. The point is, you should be careful in making this decision. It would have to be on a property by property basis, unless you are using something like a portfolio loan that involves multiple properties.

I’m curios to how investors that have owner-financed are handling this situation as well.

 James did you end up investing with AREI (or Real Estate Cowboys)? If so, how’s it going?

Seems like the magic purchase price is $110k