All Forum Posts by: Joe Ruder

Unless I am missing something however, going that route will only pay down my current heloc while still leaving all the equity tied up in the 2nd house.  I am needing access to funds quicker than that.  Or did I miss something?  100% of the rent is able to go towards debt service and there is income and credit score enough to support the refi (I think at least).

Joe

A bit more info on my end:

My current HELOC is for 124k, of which only 4k is available. Actual numbers spent was wrong as I did not take into account property taxes and other incurred expenses. Actual dollars invested to date to both keep the 2nd house and reno is over 20k. I would like to pull the 20k back out of it, plus an additional 30k. This would provide funds for continuing rehab on a restaurant that I am opening (I own the building for the restaurant - owe 50k against a building that was purchased for 150k and has had 40k or so worth of repairs and improvements to date.)

Joe

Hello;

Just wondering what some of you thought out best course of action would be.  Pretty simple setup:

1. We own a house (a second house, not our primary)

2. House is valued at about 120-140k

3. We own about 48k on it.

4. Just put about 18k into it getting it ready to rent (we don't want to sell as we may move back into it in 5 years or so).

5. We want to pull some equity out for reinvestment in other projects.

The question, should we wait until we get a renter in with a lease to show the bank that it is producing revenue or just go for a new regular mortgage? We already have a HELOC on our main house, so the money from the refi would probably just pay that one down as a mortgage rate would probably be lower than the rate on our HELOC (4.5%).

Thanks in advance for any feedback.

Joe

I get your question, I had the same thought about 5 years ago when I decided to NOT get into RE but leave my main investment money in the stock market.  Instead I started a software development company (onsite computer services) - I develop line of business applications for the transportation industry.  I do OK money wise. I absolutely LOVE my job and I am able to pay all my bills doing it, so that makes me a winner in my book.   The truth of it is I am still somewhat amazed that people will actually pay me to do something that is so much fun for me (programming).  But I sure do wish I had *also* gotten into RE back then vs waiting until now.  Even just part time and my money could have been working for me much better than leaving it in the stock market and precious metals.

Thanks for the helpful replies. 

I do have about 10 years of tax returns for the company, it is a subchapter S corporation.  Most years show a loss as I did not have a ton of income under it (most of it was W2 income) -- but there is a history there at least.

That might help, I will update this thread as I learn more in case it helps anybody else out.

I have also gotten the customer to agree to put me back on as a partial W2 employee if needed.

Joe

I don't have a lot of experience in real estate specifically yet, however, I have a lot of general business experience.  My biggest losses over the years have almost always come from not slowing down sooner in whatever project I was involved in and *taking care of business*!  From not having a lawyer review a lease (that one cost me about 100k) to not getting correct sale paperwork written up (that one hit me aboutu 10k AND resulted in a tax lien) -- if there is a dumb mistake I have probably done it.  I have not done the same ones twice at least so I am hopeful that I have run out.  My suggestion is to stop now and spend time working on your business vs in it.  It sounds like you have a knack for making money, you better make sure that you can keep it -- and that starts with getting things setup properly and well thought out.

Just my 2 cents, I am interested in reading what others will think on this post.

Best of luck!

Joe

@ Russell: what are some of the cases where a PM would lose money?  (my greenness is showing here!) - my understanding is that pretty much all costs are still passed back to the landlord.  I can't imagine just having to field the calls should eat up too much.  I'm sure I am missing something basic here.

Joe

Hello - new member, first post to pro.

Can we ask specific bank/vendor questions here?

If not, please feel free to delete this and accept my apology!

I currently bank with Regions and I am thinking of switching to Bank of Edwardsville and wanted to know if anybody had any experience or thoughts.

The reason is I was getting ready to do some various financing and I switched from being a W2 employee to being a contract employee with the same company. Very little difference in my take home dollars, all verifiable and above board but it frees me up time wise to pursue this and some other opportunities. The problem is as soon as regions found out they have classified me as "unemployed" and pretty much killed my plans. They just kept saying, well...so you don't have a job anymore? Yes -- I am still taking home 70k plus annual vs mid 80's as a W2, but they don't seem interested. I have met with B of E and initial meeting seemed positive, but my HELOC is with regions and I am not sure what to do yet.

Any thoughts or feedback would be appreciated,

Thank you,

Joe

Just a note, a friend of mine told me to go back to episode 1 and start from there.  I was working my way backwards.  Wow!  There are some real gems in there.  If you have not already done so check out the first pod casts.  I am really learning a ton -- thanks folks!

Joe

One other interesting thing is the new addition of Lindenwood college in Belleville.  *Could* be a game changer in areas close to it I think.