All Forum Posts by: Charles M.

Bueller.....Bueller.....

What if you paid cash for the investment property by way of cash out refi on your primary then go to do a cash out refi on the investment property to repay the purchase cash and for improvements? If you later sell the investment property would the basis of the cost of the property be the loan vs the sale price or the original purchase price plus improvements?

I own a house that I am rehabbing that I am getting close to having ready to advertise for rent. There is no mortgage on the house. What kind of financing should I look into if i would like to pull some money out to cover purchase cost and improvements? 

Mike, I did the Rent Analysis based on $1,700/mo. rent minus the all of the expenses (Taxes, Mortg., Insurance, Vacancy, Repairs, Cap. Expenditure) leaving about $325/mo cash flow. 

Thanks Nathan. I was actually thinking that if I sold the house I would pay down the principal on my primary and get that within striking distance (a few years) of paying it off. I would be throwing away the opportunity to have my first rental be right next door to me, but the thought of being within a few years away of paying off the mortgage is tempting.  

Hi Bigger Pockets Community. I am new to the forum and was introduced to BiggerPockets.com through "The Book on Rental Property Investment" that I am 3/4 of the way through reading. I am looking for suggestions/advice regarding a situation I am in with a house I purchased. Jan 2019 I purchased a Single Family House that had been abandoned/vacant for a couple of years before it was listed. The previous owners skipped town and the house sat until the bank took ownership and listed the house for sale. The house is right next door to my primary residence so I was very interested in purchasing with the plan to rehab and rent it. I refinanced my primary mortgage to pay cash ($40k) for the house and will have put about $60k of improvements into it when I am finished. At this point I am at a fork in the road. Do I rent or sell. My intention was to rent, but with the real estate market where it is I am not sure which decision is better in the long run. The house is a 3br/2ba 2,700sf ranch on 2.5 acres. Based on comps in the area I should be able to get somewhere between $225-255k for it if i sell. When I run the numbers (using $249k as the sales price), I see myself clearing about $75-80k after paying fees, est. income taxes, and repaying myself for the purchase and improvements. In that scenario, I give away about $55k of the equity for fees and taxes. When I did the rental analysis taught in "The Book on Rental Property Investing" I see myself with a monthly cash flow of $325-ish of which (I think) almost 1/3 would be due as tax at the end of the year. Any suggestions or advice would be greatly appreciated.
Thanks