All Forum Posts by: Jeff Houpt

I would classify this as a "good" deal, and one I would do for sure in this market. I think your cap rite is higher than the 7% Because your $9k net is probably including your debt service which cap rate shouldn't include. I would say putting that much cash down lowers your long term risk, at the expense of being able to get a higher return if you leverage. The way I approached my first rentals was similar. I wanted Higher cashflow and to sleep better until I got some momentum. Im somewhat risk adverse, so as I grew I then switched it to have one paid off home for every 4 I leveraged. I don't ever want to lose everything and have to start over. My strategy continues to evolve as I grow but these were my initial principles and I never sweated the months I had to replace an ac unit or roof!

Im in Fort Worth, and definitely still a sellers market but am finally seeing some sellers having to reduce the price if they are asking a ridiculous number. Where the market was willing to pay $10k+ above market depending on the home for the past few years. So it feels like the pace of the appreciation is slowing and we are reaching the high end of what buyers will pay for homes here. Could just be temporary or could be the new trend no one knows, but It does feel like the market is taking a small breathe.

Hi James welcome to the world of RE investing! Funny to hear Ace being brought up, they used to be a client of mine back when hey were on an ERP system called Infor Syteline I work with! I also live in Lakeside right by there, so small world. I mostly do buy and hold and have done the BRRR method, It worked well until I got to 6 properties and now I'm having to pivot away from traditional financing. I am doing a rehab in the area and just about finished with another one ready to rent. I would be happy to give you a tour of them so you can get a feel for what you're getting into if you would like.

Welcome Zach from a fellow Fortworthian, Engineer, and Real Estate investor! There are still deals out here, I've added 3 to my portfolio so far this year and just made 2 offers yesterday. I will say the competition is fierce so be ready to move quickly!

Congrats!

Hi Patrick, I live and invest in Fort Worth, TX and many of the homes I own started with foundation issues. Darn Barnett shale is soft so lots of foundation issues here. 

 It's just one of those high ticket items you have to price in when you make your offer. I didn't have to recertify the foundation after getting it done, but when you go to resell the home having a lifetime warranty on the foundation that will transfer to the new owner is a huge plus. It just gives people worried about foundation problems peace of mind that they won't have a huge expense in the future.

Other than the big up front expense, you may have to manage some small cracks in the walls and things like that but again it's just like any other expense you have to account for when you buy and when you price the rent you need to make the numbers work.

Thanks for the info gents!

My question got overlooked but I'm not giving up, I really want to learn how the fee structure works on the HELOC. Anyone with experience feel like sharing a use case? Let's say I put $100k on my HELOC on 1/1/2016 and then I paid it off 6 months later on 6/30/16. What would that cost me? Is it just the daily interest or are there other fees?

I am just now exploring this as well, how does the fee structure on the HELOC work? Do you just literally pay the daily balance interest accrued each month and thats it? Or is there more to it like sneaky fees every time you pull money like those "0%" interest credit cards that charge a 3% fee when you do a balance transfer. Oh but no worries its 0% interest for 12 months then just 29.99% after that! Scammers lol!

Just some thoughts I hope help... You might check with your bank, but many wont allow you to count your rental income the first year, so depending on how fast you move your debt will be counted against you without being offset by the rental income. Sometimes they need to see it on a tax return to count it. Though my lender will count 75% on a proforma for me if I have a professional assess what market rent is. Your D2I is in a good place so it may not be a factor at all. On the refi, I got through a curve ball myself when I got over 6 loans, My bank would no longer let me do refis on fully paid off homes, but would still allow me to finance new purchases, so I had to change my strategy... (I was paying cash on some to win the deal and refi later as needed). I would just check the limits on being able to refi with your lender and tell them your plan, if you have a good one they are typically happy to help you help themselves. Also I doubt all of this will happen at the same time, so by the time you implement phase I and close on the first multi then the rental income should offset the debt even if your lender needs to see the income on your tax return.