All Forum Posts by: Eric Dumais

Hi Eric, HELOC rates are high right now especially if you're going to use a wholesale outlet. Expect anywhere between 10 and 12%. Sometimes it's good to the shop local mom and Pop and or brick and mortar banks.

Hi Devin,

Thanks for the input, I'll speak with some of my smaller local banks. Hopefully I'll see some lower rates than 10-12%

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Quote from @Jason Wray:

Eric,

Have you looked at doing a cash out refinance versus a heloc? Heloc rates are terrible right now even if you have a low first mortgage the blended rate is usually higher than a simple refinance. When you look at the Pro's and Cons or a Heloc there are much more Cons...

I would run the numbers on an actual cash out refinance even if you have a low first versus a 2nd lien and Heloc payment combined with 1st.

Hi Jason,

Thanks for the input. I haven't thought about refinancing honestly. I'm going to be moving out of the property soon into a house hack and will be turning my primary into my first investment property. Because it's my first property I want to take advantage of the higher cash flow I should receive because of my low mortgage payment.

I'm more interested in just establishing the HELOC before it becomes an investment property so I have access to the extra funds should I need them. I'm not planning to use the money to purchase anything.

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Hey All,

I'm looking to get a HELOC on my primary and I wanted to know who others have been using and what rates they've been seeing here in Maine.

Appreciate any input.

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Hi Dan,

I'm a newbie myself, but I'm in a similar situation and this is what I'm doing...

My wife and I bought our first house in August of 2020 for 305k with a 2.875% rate. It's valued at roughly 470k now and we still owe ~265k. We're going to be moving into a unique house-hacking situation this summer and have decided rather than sell we're going to rent the property out. We should be cash flowing between $500-$700 monthly (maybe more) and the rents will be relatively cheap compared to the value of the home. But because we can cash flow we feel it makes more sense currently to keep the property and sell within the next three years should we choose to do that and we'll still be able to avoid the capital gains and maybe even see more appreciation.

We live in Portland, ME and we've been seeing steady growth in rental prices as well as continued appreciation for single family homes. They're likely leveling out, but time will tell.

But in your situation, since you won't be cash flowing I'm not sure I see the upside of holding onto the house. Putting all of your eggs in the appreciation basket seems risky.

Curious to hear the thoughts of other more experienced investors.

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Boston, Massachusetts

Quote from @Patrick McCann:

It’s going really well. Hit the target rent and have really good tenants with no issues, hardly ever have to talk to them. I have had a few minor unexpected repairs. Slowly working on fixing the unit we live in and still have some exterior work to go. Hoping to do a cash out refinance in the summer. NH has an extremely low vacancy rate.

Hey Patrick,

Happy to hear your first duplex is going well. Oddly enough I used to rent the downstairs unit before I moved to Portland some 8ish years ago. I've been curious about the Dover market, but it seems like it's become too expensive for anything to cashflow. Have you found yourself looking at other markets or are you seeing potential in Dover?

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Manchester, New Hampshire

Quote from @Cason Giordano:

I'm diving headfirst into the world of real estate investment, specifically using the house hacking method in the stunning New Hampshire area. But here's the kicker: despite having the down payment ready to go, I hit a roadblock with income requirements when speaking to a lender. It's a bit frustrating, I won't lie.

However, there's a silver lining to this story. I've recently started working alongside an incredibly experienced broker right here in New Hampshire. What sets her apart is not just her impressive depth of knowledge in the world of investments, but also her unwavering dedication to people and their dreams, as well as giving to charity.

Here's the scoop: She's not just a broker; she's an active investor in her own right. She gets it – the ambitions, the challenges, the sheer enthusiasm that comes with wanting to invest. I shared my goals and dreams with her, and her response has been nothing short of amazing. She's not just aware of my aspirations; she's actively helping me turn them into reality.

Here's the point: If you're in the market for someone to represent your interests in the New Hampshire or Massachusetts area, I can't recommend her enough. She's got the investment smarts and, more importantly, she genuinely cares about you and your journey. Your goals become her goals, and she'll leave no stone unturned to help you succeed.

In a nutshell, if you're looking for a broker who combines a wealth of investment knowledge with a heartfelt commitment to your success, I'd be thrilled to connect you with her. Your dreams are worth pursuing, and with her by your side, you're setting yourself up for success.

I would love your agent's contact info. I'm very interested in investing in Southern NH.

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Manchester, New Hampshire

Quote from @JD Martin:

Quote from @Eric Dumais:

So I've been stuck in analysis paralysis for a while now and I'm finally at the point of pulling the trigger, but I'm still hung up on one thing. I hear a lot of people say cash flow is dead, you can't BRRRR with today's rates, etc. I've been analyzing properties daily in locations I'm interested in investing to get practice and the properties I'm looking at cashflow on paper (yes, with maintenance, vacancies, capital expenses, and PM factored in). The properties I'm looking at wouldn't even necessarily require a BRRRR, but I know I'll do some upgrading and want to refinance eventually.

But I'm clearly missing something which of course is giving me pause because I've yet to buy my first property. Can someone please help me with round numbers and explain how pulling money out of a deal can affect cash flow at the end? I'd love to see numbers from the original mortgage through to the refinance stage. I just don't fully understand when I hear on podcasts "We couldn't pull all of our money out or we wouldn't cashflow."

Thanks in advance for any help. I'm really hoping to have an "Ah-ha!" moment.

Ok well let's look at a simple example. You buy a house for cash for $75k. You put $25k into it also cash. It rents for $1000/month. Let's pretend tax and insurance costs $200/month and you set aside $100/month for vacancy, maintenance, and capex. So you are cash flowing $700/month. Your ROI is 8.4% (8400 annual net/$100k). House is worth $125k.

Now you go get a mortgage at 80% loan to value, about $100k. At a 7% interest rate your mortgage is $665. Tax and insurance is $200. You set aside $100 vacancy etc. $1000 rent - $995 in costs = $5 cash flow. It doesn't leave you much left over for anything. Your ROI becomes essentially infinite, since you have all of your original $100k back, but your actual cash flow is reduced significantly. If you left more cash behind, say with a $50k mortgage, you get more cash flow but less money back.

This is all simplistic and there's a lot of nuance but hopefully this gives you an idea of it all.

I really appreciate you spelling it out like this. I now understand when you pay with cash that you're just borrowing money against your house and you now have a mortgage. So "pulling money out" is just taking a loan.

But to continue with my questions how would this work/change if you didn't buy the house in all cash? If you only put 20% on a 100k house? When you refinance you don't have to pull out all of your money obviously so I guess the part I want to understand is how to do you do the math on finding your limit for cash to pull out?

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Thanks in advance for any help. I'm really hoping to have an "Ah-ha!" moment.

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Hi,

I've been interested in real estate for some time now but haven't made the plunge. Finally convinced my girlfriend that we should buy a duplex and house hack for a year or two rather than buying a single-family for ourselves. I don't know how much I'd be able to contribute but I would love to just meet some people and talk and get some advice. Is this meet up something I'd be welcomed at or is this more for seasoned vets?

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All Forum Posts by: Eric Dumais

Eric Dumais has started 2 posts and replied 10 times.

Post: First investment property in Central NH

Post: HELOC Lenders/Rates in Maine

Post: HELOC Lenders/Rates in Maine

Post: HELOC Lenders/Rates in Maine

Post: Moving, sell or rent old house?

Post: Happy to be Here!

Post: Buying/Investing in Property in NH

Post: How does pulling money out affect cash flow?

Post: How does pulling money out affect cash flow?

Post: Southern Maine Monthly Investors Meetup - October 2019