All Forum Posts by: Jerry D.

I am I. Houston also and am seeing the same thing.

I had a great meeting with the portfolio lender so that made me feel well. They view cash flow as rent*.75-interest,principal,taxes and insurance. As long as its positive it won't hurt me being able to qualify for a loan. I also found out my wife wouldn't qualify yet because she hasn't been working. Yes she will need to qualify for a loan herself. She will be going back to work soon so I am guessing she will need to be working for at least 1 year to 2 to qualify on her own. So with that said. Would you refi the properties or maybe do a heloc on one and refinance the other two? I guess I am back to square one. How to move forward. Do nothing, refinance, or heloc?

Most of my loans were with private money lenders that gave me great interes rates. But they still count as a mortgage because I claim the interest off of my taxes. So not real sure about that. The banks in my area that I have found that will help me is. Cash out refi-bank of texas, heloc on investment properties-wellsfargo, portfolio lending-prosperity bank. Not sure that will help too much. I just called lots of banks and talked to lots of bankers and wrote everything down. Also a mortgage broker maybe able to help some. I have a guy that I could recomend but don't want to advertise for him on just message me. I also don't have any experience yet with Multi family but have looked at it some. Sorry I couldn't be more help.

To clarrify. Wouldn't I be better to cash out the 3 properties I own outright therefore those properties will be on 30 year fixed notes at 5%. The cash I then have would be down payments for houses that my wife could buy at conventional terms of 30 year fixed at 5-6%. Correct? I would much prefer the 30 year fixed vs 15 years. As long as I have adequete cashflow and reserves for repairs,and vacancies.

Thanks for the Reply. I didn't know that about my wife. Does she have to have her own tax return? We file jointly? As far as equity in the others their is some but not enough to justify paying 4k in closing cost to obtain 10-15k. I got a little lost on the part about wrapping them in to the non conventional. What I meant by that is that another local bank will allow me to buy as many properties as a qualify for because they keep them as portfolio loans. If my wife can put them into her name then. I am set. I can refinance the 3 I own outright giving me enough cash to put down on 10 more properties that we will put into her name. As long as they cash flow and I have enough in reserves to cover expenses. That should work?

I am at a crossroads and need some advice.
My goal is to have enough income from my rentals to quit my job and manage full time. I think I am about 7-10 more houses away from acheiving this goal. Currently I have 9 rentals and my house. If you include my house I have 7 mortgages. Which means I have 3 of my rentals that I own free and clear. I am young and want to leverage the properties to buy more. Currently using the 50% formula they are all cash flowing though I am managing them all myself. So here is the scenarios I am facing.

A-do nothing; save up money for my next purchase. I will need 25% of next down payment. I should be able to get three more traditional mortgages. After that I will need to get a portfolio loan from a local bank. Rates on that will be a little higher and payback period will be 15 years instead of 30 which hurts cashflow. Rates will be about 5-6% 30 year fixed. I should be able to qualify for 3 more properties financed traditionally(Sold to fannie and freddie) After 10 properties financed I would then need to go to a local lender which I have found which will give me terms of 20% down and 15 year fixed at 5.9-6.3. Plus side to this scenario is that my cash flow is great, no more debt taken on.(refi or heloc) But down side is less leverage. I will have a ton of my own cash sitting in 3 houses that I could better use to invest in other houses.

Scenario B- Get a heloc on one or all three properties.(ltv 70%) Terms 10 year term. Interest only payments. Rates about 6% amortized over thirty years. After 10 years any amount on line would then become a loan. Over 20k goes into a 30 year fixed with whatever the rates are at the time. Under 20k goes into a 15 year loan. Good thing with this scenario is no closing cost at all. Bad side is I like having a fixed rate and feel interest rates in 10 years will be much higher then the current 5% I can lock in currently. The rate on the heloc will fluctate. The other downside is that for every house I get a heloc on is one less that I can get traditional financing on. I am only allowed three more and I will then need to go to 15 year fixed instead which eats into cashflow more.

Scenario C
I can do a cashout refi of one or all three with a bank that will give me 30year fixed rate at 5%.(Ltv of 70%) Problem is closing cost are around 4k for each house. For each one again I lose the ability to buy and finance my next house at a traditional terms. Good thing is I will have a great rate at 30 years which will help cashflow a month. It will be locked in and I will have a ton of money to either buy about 7-10 more houses or a small multifamily, or down payment on a multifamily. Given what my reserves are at the time.

Not sure if this post makes since it does to me. Feel free to comment and ask questions. I would love to hear what yall have to say.