All Forum Posts by: Account Closed

I'm doing similar. Have another heloc closing soon. 

Interest starts right after you draw, but it should add up to the monthly amount close if not exact to a heloc calculator you can find online. 

Example: A 31k balance @ 4.75%, 12 years - That's $127/month interest only. 

If you pay down the 31k principal the interest will go down to the new balance, but it sounds like you're pay the interest monthly till you flip then pay off the balance.

First two were easy and were 2 years apart between purchase. The third was really difficult only 6 months from last purchase. It was zero-down using a heloc for down+closing. Now letting tenants pay it off and shoot some combined cash flow to it.

It's time to rake it in for a year or more. Also save money from my day job. Just pile it up. Credit boosted to 828 as well. Maybe go for the 4th later, but I'm not losing sleep over it. Other things to do and enjoy.

The thing that always gets me about this is the closing cost for the Cash Out Refi. It's not cheap or free. Been quoted @ 5-6k for 75% LTV. I'd have to pay 5-6k to get the cash back out or add that cost into the new loan if it's a "no closing cost" refi.

Does this strategy factor in the closing cost for Cash Out? I guess it could be made back from the cash flow or financed into the end of the new loan. 

@Shefali R. - PenFed

I found the HELOC really easy to get. Even got it for free on a rental property @ 80% LTV, 4.75% 12 years interest only without closing cost or appraisal! Now using it as a down payment on another property closing this week. I would eventually channel more cash flow to the principal to pay it off quicker.

I would shop around local credit unions. The one I got didn't have a requirement for how long I must have the property. I'm also getting another HELOC on another property soon.

Cash out refi doesn't seem appealing to me in that it's 5-6k closing cost for less LTV. It's also not reusable. I still have the option to do that in the future if I don't have the need for HELOC anymore.

@Reece O.

There are a lot of 4 Plexes built in 1900 and even earlier. Fewer are built in 1940s and 50s. Are these to be avoided at all cost? All potentially have lead paint. The numbers work for some of these 4Plexes. Some of them are not broken down. They are up-to-date and already rented as well. 

I was able to acquire a 1987 Duplex, which was rare but have stopped there. I don't think it's possible to get a 4Plex after 1978 around here. Should I even consider an old 4 Plex?

I've been wondering about this as well. What if the ADU is already there? Would I have to get a commercial loan for a 5 unit property? This property is in Hagerstown, MD.

"4 Unit Rental with 5th unit detached in separate bungalow."

Welcome. I live in Frederick and have two rentals here. I have another closing in Hagerstown soon.

I didn't know there were any meet ups for investing here. Is there a website for this new group?

So I'm closing on a third rental. I'm using Heloc for down payment strategy to acquire new rentals and letting renters pay it down. Currently I have one Owner Occ with roommates that I plan on moving out of when the year is up and renting the last room. This lets me look for another primary residence with another Owner Occ loan. I would be covering my primary with my day job.

How important is it that the 4th house should be my Primary?

If I go for a 4th rental, will it be difficult to get a Primary Owner Occ on the 5th?

Am I jeopardizing my chances to get a house for myself to live in??

The biggest sacrifice would be giving up my primary and renting it out. I hope to get a primary this year and 2-3 more rentals after. It's only a minor inconvenience and I have an end settle down goal. 

I would figure out a shorter commute for work. That would make it a whole lot better. When I was 23, I did a 2.5 hour commute for a year then started working from home and never looked back. Makes a huge difference in life quality all around and financially.

I second Luc. Keep it up.

When I turn 50 years old, I won't be working so hard to support a massive divorce loan, underwater house, and vacations. Now is the time to set yourself up right. What other people blow their money on now isn't even that great. It's all losing large amounts of money to be popular.