All Forum Posts by: Jesse Holshouser

I have a general financial/psychology question. A bit of back ground, I have owned 3 homes and a couple of rental properties. I currently only own my primary residence. It is a 6 acre farm with a brick ranch. We have been living in an RV while we rehab the house. I paid 210k for the property and have put roughly 150k into it. When it's all said and done, based on recent similar property sales, including a neighbor with the same size house and 6 acres, I expect the property to be worth 425-450k. I owe just under 150k on the property.

My question is, do I refinance and pull my equity out to invest or do I pay the property off and enjoy the freedom and peace of mind of not having the mortgage? I understand mathematically, it probably makes more sense to refinance and invest. But psychologically, I'm drawn to paying it off, especially with my first child on the way. I could also still establish a HELOC and use that to finance rehabs if I decide to flip in the near future. Just looking for general thoughts/philosophies of other investors. Thanks!

Just went under contract on a duplex. Purchase price 78k (will likely renegotiate once I get inside and see what capex and repairs are needed). Current rents are 450 each side. I have 2 options for financing: 25% down at 5.4% plus some monthly repair expenses puts me cashflowing somewhere between 250-300 a month. My question: I can also get a 5 year ARM at 3.8%. Should I go this route and just pay the property off by year 5? I was considering paying the entire rent amount towards the mortgage anyway which would have me paid off in 7 years. Should I pay for 30 years and cash flow (leaving more money for other deals) or sacrifice current cash flow in order to pay off in 5-7 and have greater cash flow later and a paid for property?

Welcome to BP! NC is a big area.. Can you be more specific?

@Larry Turowski @James Wise, I see your points. The man is in his 60s, retired and doesn't want to fool with the properties any more. He actually has a 7 unit also for sale but wasn't planning on listing the duplex yet. He doesn't need the cash but wants to relax and enjoy his retirement so my offer to him was to provide him with income in the form of mortgage payments without the hassle of collecting rent, placing tenants, and doing maintenance and repairs. He seemed to like the idea but was a bit skeptical. I appreciate your input and will see if I can find something to sweeten the deal!

I found an off the market duplex, contacted the owner and he is interested in selling. He contacted the agent he usually works with in order to determine an asking price and she is showing me the property on Thursday. When I originally spoke with the owner, I expressed interest in buying the property with seller financing and he said that was a possibility but was concerned about me not having skin in the game and deciding not to make payments on it anymore. I would love some advice on how to negotiate a seller financing deal and I am also wondering where the agent plays into that kind of deal. The house isn't being listed, but can I still buy with seller financing? I intend to make it clear that even if I only put down 10% with seller financing, he could foreclose on the property if I stop making payments, he gets the property back and can keep that 10% down payment. So he wins either way. I would also probably suggest a 5 year balloon and either pay him cash for the remaining balance on the note, or refinance. If anyone has any thoughts or advice, it would be most welcome!

I bought my first property FSBO. This was pretty much the process we went by. We did use an attorney though and he handled escrow/earnest money. How will you be handling that? Or is the seller not requiring it? Both me and the seller actually used the same attorney and split the costs ($250 each if I remember correctly). Other than that, it looks like you've covered it

What prices are you referring to? Insurance? repairs? vacancy? capex? Property Taxes? Are you using the bigger pockets calculator? If you are, you can place your cursor on the question marl next to the input and it will give some instruction on how to find those prices, or at least get a good estimate

Have you tried a local bank/portfolio lender? They don't sell their loans like the big national banks do, so you don't have to meet Fannie and Freddie guidelines. You will still likely have to put 25% down for an investment loan, though some only require 20%

Have you spoken with a Lender to see what options you have? You may be able to do an FHA loan on the duplex (3.5% down) and then sell your house once you have the duplex under contract. If you can get your house under contract, that would help with the underwriting for you FHA. I would suggest you make an appointment with an FHA lender and ask these questions. They will be able to look at your exact situation and advise you

@Jake D'Acquisto @Jeff Brower @Linda S. Thanks for the input! This property went on the market about a year ago and was taken off in December because it didn't sell. I was able to find the owner and they are still interested in selling. Its a 4 unit and multi-families are scarce in my market, but so are buyers of multi-families. I think the property is probably normally worth what they are asking but it has some deferred maintenance. I'm thinking I should offer less than what I'm willing to pay, but not too low? Would it also be fair to ask that they pay closing costs since I will need some cash to take care of the deferred maintenance?