All Forum Posts by: Account Closed

Hi Khalil,

I think there are a couple things left out that you’ll need to answer...I would start with: what is the current rate of the loan on your current mtg principal?  If you do a cash out refi for say $45k, how much will that raise your expenses? I would crunch those numbers first.

Then depending on what property you’re looking for, what will you do with the cash out money? What’s the price point, how much down, how much is left for rehab, etc.

Maybe even read David’s book (and others) about long distance investing and see if that’s for you? Maybe you can get more house/rehab out of state?

The way the market has been going, i’m not sure you’re going to get ‘more home’ if you do a 1031.

Good luck with everything! 

Hi Tatiana!

You definitely aren’t crazy. It’s tough out there right now in Phoenix to find something within that 1% rule.

I think you’re either going to have to be patient and really door knock and talk to a LOT of people, and/or try to not limit yourself to the 1% rule to break in (if you want to live in Phoenix).

Find something where you could find a 2-4 plex where the other 1-3 units cover most of your mtg. and start building equity and locking into a low long term rate. That’s not to say a 1% deal might not be out there, but my advice would be not to just consider those if something else makes financial sense. 

I agree with both James and John. Assuming you’re committed to building, that’s why not buying the lot outright would most likely be the way I would go. 

Crunch the numbers though and good luck with whatever you decide!

Hi Ivan,

I would double check to see what rates and financing make the most sense.

For example, it might be better to do a cashout on your rental to pay for the lot and use the excess cash (from the refi) and your cash do build the duplex. It might be cheaper to not finance the construction. Then after that, do a cashout on the finished duplex.


It all depends on the acquisition price of the lot and the cost to build though...

good luck!

Hi Young,

There are good and bad areas everywhere, but some cities that will most likely have more A/B neighborhoods: Scottsdale, Tempe, North Phoenix/Paradise Valley.

Good luck!!

I’m not sure it’s conveying the full picture when saying the values have increased 114% in the past 10 years because that’s going back to the cratered values of the recession (down 60% from 2007-2012). So if the values came down 60% and from there went up 114%...there has been appreciation but no where near the 114% if that makes sense.

Having invested since 2005, one of the main differences between now and back then is financing. Stated income and banks pushing loans back then had everyone buying homes they knew they couldn’t afford. Many thought they could just sell in 6 months and make a quick 15%.

Today has many more checks and balances before being able to qualify for a home/investment property. 

I could go on, but I think with good weather/no natural disasters, cheap but more stringent financing, a hot job market, and seeing a number of Californians moving here (along with other out of state buyers), we won’t see anything similar to 2007-12 maybe only a slight decline or flat appreciation if there is a national dip.

Congrats Jarvis for taking the plunge! My only advice in this market is to make sure you are picky in finding your property. Make sure it’s a deal that you’ve run the numbers on and it makes good financial sense. Don’t rush into buying a property just because you want to get started.

Also, don’t get discouraged and keep at it.  Good luck!!

Well it can be intimidating with it being your first investment property. If you want to get into investments though, this could be a great opportunity for you depending on rental comps in the area.

If there is a downturn, remember that you’re renting the home. So unless you plan to sell it within a certain period of time (during a downturn) what matters is the rent covering your loan payment; Not the value of the home. 

It’s a big decision though no matter what. That is just my two cents.

What's the LTV on that $347k loan? I'm not quite sure how ‘dark' those looming clouds are in the Biltmore area especially.

It’d be tough for me to sell a property in that area unless you need the money for a house that you’re moving into.

30 years at a great rate looks good now but will only look better as the years go by.

Run the PM numbers along with other HOA or misc. expenses and see though.


Good luck though whatever you decide!

@Sean Harris

So you would be purchasing the building (not the land) and be responsible for paying the ground lease rent while also collecting rent from the tenant of the building?

From experience, this is what I see from this deal...this is just trying to explain some things to someone new getting into this:

The NOI of the NNN retail building is $17k+ which translated to the low 4% CAP which means you would most likely have to pay cash and or put a significant amount down to get it financed and have it pencil out.

The tenant strength is very important. Ideally it is a corporate guaranteed lease or the strength of the tenant is strong.

How many years are left on the lease? Are there any options? How often are the rent bumps?

Anything with a low CAP Rate where you don't own the land, you should hopefully have a lengthy remaining lease and ideally a corporate guarantee.

I hope this helps and I read the deal correctly ha!