All Forum Posts by: Jason Bohling

@Andreas Mueller I live in the Boise area and the selling started here a while ago. There’s actually several of my neighbors that have had to sell their houses at significant losses because they’ve had to go back to California because of their work.

We’ve had others that have had to sell their house because they severely overpaid and lost their job because they couldn’t or wouldn’t go back to California and were unable to secure local employment that paid close to the California wages.

@Theresa Harris yep. At the bottom I.e. around 2010 you could buy houses in Phoenix and Miami for example that were only 2-3 years old that literally just needed the carpet vacuumed for less than the land value. Had a buddy in the Air Force stationed at Luke at the time that picked up 3 houses, all 3 were 2000 sq ft, 3 bed 2.5 bath and 3 years old. They were in the same subdivision from a builder that was desperate to unload them. He paid $50k cash for each one.

@Jay Hinrichs so true. My mom has a property outside Fort Worth; her property taxes when she bought it 20 years ago were $1600/year. Her newest tax bill is nearly $5,000/year. It seems like despite rent increases the extra margin got eaten up by ever-increasing property taxes. On the insurance front, her premiums have doubled in the last 20 years and her agent told her a couple weeks ago that when her policy comes up for renewal she should shop around cause her insurance company (who shall remain nameless) is jacking up their rates in that area significantly.

@Nick Richards I'm a service-connected vet, myself and have used my VA loan on several properties bought and sold over the years using my VA compensation as income to qualify, so not an expert, but I know a thing or two.

You can absolutely do what you’re wanting to do, and it’ll actually probably be easier than you think. As for the residence, just go get a post office box; a close buddy I served with lives in a custom trailer pulled by his truck, but his official residence is a post office box in Tacoma, Washington.

As for the credit, the VA loan is a little different than FHA or conventional loans; you don't have to have a high credit score (if I remember correctly you just need a 620 to qualify as far as the VA is concerned) and whether you have a credit score of 620 or 820 the interest rate is the same. Additional good news for you: because VA disability is 100% tax-free, it is ‘plussed-up' when calculating your gross income…so say your disability pay rate is $4,000 as you said, they multiply it by 1.25 so the gross income used would be $5,000 not the $4,000. Awesome, huh?

Now, lenders do have the ability to tack on their own qualifications that are allowed by VA, so check with several lenders as I want you to have the most accurate information.

@David M. unless it is with a portfolio lender which most credit unions and many local banks are. The credit Union my primary home mortgage is through keeps all their mortgages on their books so they would probably be more inclined than others to call it. That being said, what you said makes sense and you have a good point.

@Kevin Lee If between just those 2 options, I would pay off the mortgage. However, first ask yourself if you have ample reserves for capex, repairs, essentially a large enough buffer to weather a bad ‘storm’ or two. If not, build those reserves first. Then pay off the mortgage. With those two options you are choosing between guaranteed returns and the mortgage payoff is higher, plus it reduces debt which means it reduces risk plus you will have higher cash flow in a few years.

The only upside with the bonds besides the guaranteed returns is the level of safety by having the money liquid in an emergency. If you have those ample reserves, this gives you both the safety in an emergency coupled with the higher ‘return’ from paying off the mortgage. So, that is what I would do if I was you. Hope this helps and good luck to ya whichever way you go.

@Cole Payton so what I did was refi'ed my personal residence to a 2.75% interest rate and this will eventually be a rental when we move on. That 2.75% helps quite a bit as far as cash flow that I can get when I do rent it out, in the meantime my mortgage is super low. To access the equity, we got a HELOC on it. We were able to get a 90% loan-to-value on it and with all the interest rate hikes it's currently sitting at 9.74%.

I went this way because it allowed me to keep super-low long-term debt on it while allowing me access to the equity (to use as short-term debt such as a down payment or rehab in a BRRRR that I can refi out of later and pay back) as I need it. It didn't make sense in my situation to cash-out refi into a higher interest rate and higher mortgage payment that I will have to make every month no matter what, just to have a pile of cash that will be sitting idle most of the time. The HELOC allows me to access what I need, when I need it. This set up gave me the greatest terms with the most flexibility for my situation. This is what worked for us.

Now, a mistake I see people make a lot is when figuring how much equity is available. If say, you have a house valued at $120,000 and you owe $80,000 you have $40,000 in equity. The mistake I see is people thinking if they do a cash-out or HELOC at 80% loan-to-value, they think that means they get 80% of that $40,000 to use which would be $32,000, which isn't correct. The way it's actually calculated is you take the $120,000 x 80% which equals $96,000, then deduct the $80,000 owed leaving $16,000 in equity you can access, not $32,000.

Another couple pluses for the HELOC vs cash-out is with the HELOC, I had no costs at all, whereas with a cash-out you will have several thousand in closing costs and the HELOC even once I move will still stay on this house and available to use for the rest of the draw period.

Good luck and hope this all helps.

@Bruce Woodruff I agree. I’ve been interested to see how things were going to play out since the relative ‘COVID boom’ started happening. While some areas are doing just fine there’s no doubt some are in fact struggling. While I feel for those who are struggling cause I’d love to see everyone succeed and I have respect for anyone willing to throw their hat in the ring, it will make the industry stronger in the long run in my opinion. While it was almost anyone with a space to rent was raking in cash several years ago, as things shake out economically it’ll create better, more reliable data that investors can go off of when planning out their investments.

@Bruce Woodruff the guy they cited has a company called Reventure Consulting and has a bunch of videos on YouTube…to summarize his content, the entire industry of real estate is in an utter free fall and he’s predicted a depression-level collapse for a couple of years now. I live in and am from the Boise area, and when he started putting out content a couple years ago he did some about Boise and virtually everything he stated could not have been more wrong. From what I’ve seen, he’s one of those guys that claims a collapse because ‘foreclosures have tripled in the last 2 months, so get out of x-area RIGHT NOW’ when the number of foreclosures have gone from 3 to 9. So, anything he puts out I take it with a grain of salt.

I’m interested in learning more about Section 8 to see if it’s something I want to explore. Does anyone know how I can go about finding out what the approved voucher amounts are for each bedroom/property size for a given area? I’d like to know how much I can potentially charge to see if financially it would be worth it and viable in regards to cash flow.

Thanks in advance!