All Forum Posts by: Justin Green

Welcome Julie,

I love Hood River it is truly an amazing town in the PACNW. I have been a fellow lurker for a long time as well (outdoor nut too). Great first steps renting your primary residence to start. I am in that process now. I work in NoPo (Kenton) and remember well when values were extremely low, amazing turn around from just 5+ years ago. Great rental market now there as well. Nobody thought NoPo would be that desirable back then.

Good Luck to you and see you around BP :)

I do not need the cash flow now. I would rather have it pay me for ever. Risk is being so tight or negative for the next decade. If I can raise rent after 1-2 years that will help cash flow (-tax increases). I plan to set aside a reserve account of $10-15K in the first year for this property.

Thank you all for the input. This is a big leap of faith.

Jon,

4.375% I could get better around 3.5% now for a 15 year loan. Costs of about $3000

PITI payments at above rate would be around $1350. Current is $1550

For more info. This was a primary residence for us. Also all major repairs have been competed. It is on a 15 year loan with 10 years left. I can refi and reset 15 years for $250 a month cash flow. I am more of a debt free type guy. Delayed gratification in turn for some expenses, vacancy and some time inconvenience. It can be a cash cow if I hold it and make the basement rent able later on as well. If later on I put 30-40K into the basement remodel it can add $650-700 a month rent as a duplex.

Question?

Would you hold a rental for 10 years with little to no cash flow to have 100% cash flow once it is paid off? You only get tax depreciation, principal pay down, market appreciation in trade for your time running your own PM.

Or would you refi the loan to 30 year with $600 cash flow per month? Obviously shorter loans would net less. This gets all the above plus cash flow.

Numbers;

loan $140K rent $1500 per month

23 First primary residence and a baby within 6 months. 10 years later at 33 renting it out while moving up. Thought I was rare buying in early 20's great to see so many others bought young. And your never to old to start.

Question for those with more experience

Should I hold our current home as rental for 0-$100 per month cash flow for 10 years to be paid off, or take the cash out and sell now?

My family and I are closing on our next personal residence next week. We borrowed 50K from my 401K retirement in order to offer and win the next house. Here are the numbers below

Current home we owe 145K on a 15year loan @4.3% with 11 years left currently knocking off $750+ in principal per month with a total PITI payment of $1530. Market rent for this property would be $1500 so zero cash flow, the return will be in appreciation and principal pay down. Its possible to up the rent $1-200 per month to assume some risk (pets, month to month, ect..)

To sell now and move on. Market value is $228K. I am a real estate broker so my net will be higher (228-145-7) Netting around 75K now. That will repay the 401K loan and replenish our 25K investment to move into the bigger house, The bigger house will also be a similar PITI payment on a 30 year loan.

Renting seems to make more financial sense since it will basically be a tenant letting the investment grow with myself risking the major capex every few years. I will be paying $500 per month on the 401 in this scenario during the 10 year period. The rental market is very strong and if it continues market rent would be over the PITI payment within 1-2 years. The reward comes 10 years in to be 100% cash flow at market rent.

I would appreciate any advise given.

I just purchased an REO property that needs work. You will not be "officially" allowed to do any work until day after closing and the home is yours. Get your contractors and bids lined up during inspection period. Read the contract carefully, on mine the Bank has the right to remove the lockbox after the inspection period. I sweet talked the listing agent to leave hers up till closing to still get in and get bids for work. Your Realtor should have good references for contractors and be able to get them in to look.

Good Luck

As a Realtor I would say finding one that is on the same page with you as far as your goals as well as a great connection. You also want to make sure they will work for you in a similar fashion as you would work for them, Meaning if speed is of the essence they need to be on top of everything, if numbers are your game they need to show you numbers. Response rates to issues and questions can range from minutes to days on both ends. Lay out that criteria first how often do you want communication between you and your Realtor (multiple times a day or once a day or 2-3 times a week). Myself I focus on speed and efficiency and will be on the other guy as many times as needed to resolve the issue fast my clients love that persistance. It is a tough job and you get pulled in multiple directions.

good luck

I made the jump about a year ago to explore Real Estate as a professional. Thought I would share my story here. I strive to be the best in any chosen profession and have become a great technician and leader in my current field. I am still working full time 50-60hrs a week in the technical IT field today. I set a goal of 5 deals in Real Estate this summer. Today I went into contract on deal #5 and it is only the middle of summer. My 5 deal goal was reasonable and shows that I can make a living doing this. It also shows my wife that all the late nights and weekends do actually produce income to feed our family. I am working M-F 9-5 plus OT and some weekends and travel the country with the technical job and practice Real Estate from 5:30pm-11:00pm most weeknights and every weekend and every day off. This weekend I lost 2 deals, Yesterday I closed, offered, and listed. I dream of the freedom of doing what I want and no longer being controlled by someone who has no compassion for my life or my family. The fear of failing is hard to swallow. I will fail. I have Failed and I have succeeded at reaching my Goal. I am loving this new path in life. My reasonable goal is done now the next 10 deals then quit my 9-5 to focus on 40+ deals next year. 100 the year after.