All Forum Posts by: Gayle Melnick

Hey everyone,

I'm hoping to get some feedback about this. I'm considering doing a cash out refinance on one of my rental properties. I'm looking at taking 30k out and changing it from a 30 year into a 15 year. The PITI would be $1380. My current PITI is $840. Rent is $1700. Over the course of the refinanced loan, the total amount paid would be about $188k. Over the course of my current loan, the total amount paid would be $302k.

It seems to make sense to do a cash out refi because I'm long term paying less money for a larger loan. I get cash now rather than waiting a couple of years for a 30k profit. Obviously the risk is that the new numbers figure for me to break even when I factor in maintenance, vacancy, capex. It currently cash flows a few hundred a month. Also, I don't have a crystal ball and I can't say for certain what rents will do in the next 15 years. To mitigate that risk, my other rental property I get $1400 rent with the PITI at $704. I figure between the two properties, I shouldn't have to use money from my regular job to pay for expenses because the cash flow on the second property is large.

I’m just looking for some opinions about this. I think it makes more sense to me to pay less over the course of a loan and get cash now. But it certainly comes with risk. 

I’d appreciate any input. Thanks!

@Kenneth Cheston

I have a two bedroom as well in Remington. It's fully renovated and I had a lot of interest even when I posted it for rent mid December. I'm only getting $1400 but the second "bedroom" is not really a true bedroom... more like a 1 bedroom with an office. I just bought it at the end of last year though so I can't say whether the ease at which I found tenants will always be true or if I just got lucky.

@Sebastian E. that's incredibly high. That would be years of not paying a water bill. If you've been current on the water bill for the last several years, I'd assumed something is wrong. I called them a few weeks ago because the bill seemed too high for one of my rentals. I spoke with a human and he was helpful. I'd try calling.

@Ozzy Sirimsi

Got it, thank you for clarifying!

Thanks everyone for the input.

@Ozzy Sirimsi

Thanks for your input. If I’m not in a rush, the lengthy board approval isn’t really a problem. 

I'm thinking of adding two one bedroom one bath units. The reason I think it may be better is because if you're looking at just the numbers, the ROI is better for the addition. I think the cost of that addition would be far less than buying two additional separate rentals for $1100 each per month.

In terms of the appraisal after, not sure I understand why they wouldn’t consider my property as a multi unit rather than a single family? If it’s three separate units all separately metered and permitted through the city, they should use other multi family properties as comps, right?

Hi everyone,

I wanted to see if I could get some input on an idea I've been thinking about. This is going to be a little long winded so I appreciate anyone willing to read it and give me some feedback. My primary residence is a Baltimore city row house in a desirable neighborhood. There's a large first level bump out and a back deck. What I'd like to do is turn the deck into additional interior living space, then vertically increase the bump out on the 2nd and 3rd levels. The 2nd and 3rd level bump outs would be two separate 1 bed/1 bath units. I'd have exterior stairs in the rear of the home for separate access to each of those units. I live in a neighborhood that allows both single and multi family. The reason I want to do this instead of just buy another rental is that I think the ROI would be higher for adding these two units than it would be to buy additional properties. Both units I think would bring in $1100-$1300 each.

I don't have enough equity in my house to get a HELOC to fund the remodel. I used a VA loan to buy the house two years ago and I put nothing down.

I also just purchased my first two buy and hold rentals at the end of this last year. I used a large part of my savings to buy these homes. They both have paying tenants and are cash flowing $400-$500 a month. I have equity in both houses as I put a 25% down payment on both and did improvements to both.

Does anyone think this is a good idea? Am I better off just buying additional rentals? If it's a good idea... what do you think the best way would be to finance this addition? Should I save up again and pay cash? Is there a way to do a cash out refi based on the projected ARV once the remodel is complete? Should I get a hard money loan or personal loan to finance the remodel, then refi to a 30 year note based on the new ARV and hopefully there will be enough cash in the refi to pay off the hard money loan? Any other ideas?

Thanks everyone!

Thanks everyone for all your input!

@Sarah 'Sadika' J.

Short answer: yes

Longer answer: contact the zoning department. I’ve contacted them a few times and they’ve been helpful.

Also, your GC should be doing the permitting process for you. Make sure it’s in the scope of work. Hire a company that knows this process. 

Hi everyone,

I want to renovate a bathroom in one of my rental properties. The tile is in decent shape, the grout looks like it could be redone but mostly it's just extremely outdated. There is tile on the floor, a tub, and then tile installed on the walls surrounding the tub.

I want to install luxury vinyl tile and a basic tub surround. I've found materials that according to the manufacturer can be installed directly on tile. 

I've gotten an estimate for installing the LVT and tub surround directly on the tile and another estimate for demoing the tile, then installing. Obviously the second option is more expensive.

Is there a reason why I shouldn't go with the cheaper option and install directly on the existing tile? I don't want to spend money on this remodel only to have an issue in a few months because I didn't know installing it over the tile would cause problems. 

Thanks for your help!

@Brad Fallon

When I first bought my house in Hampden, I used my VA loan and I put nothing down at $305k. I also bought a house that was fully updated so no room for forced equity... this was before I knew anything about real estate. But, I house hacked. It's a 4 br/2.5 bath. At one point there were 5 of us living here. I brought in $2300 in rental income and my mortgage+taxes+insurance was $1900.

I only have one roommate now so my rental income for my primary residence is obviously a lot less. My point here is that you can buy something in the 300s in an A neighborhood with literally nothing down and still make money or at least come close to living for free with house hacking. It's not necessary to try to speculate on an up and coming neighborhood when you're house hacking.

If I were to do it again, I'd look for something in a neighborhood that I wanted to live in that's already set up as multiple separate units rather than renting out rooms. I'd also try to find something that I could force equity with and not something that's fully updated. 

Good luck on your search!