All Forum Posts by: Joe Ruggiero

@Caroline Gerardo thank you for this! This was very helpful. I definitely understand your logic. if I plan to keep this property beyond the 12 years as this is a buy and hold investment would this be considered a good move on paper? 

It’s also realistic to think that most likely rates will at some point begin to increase from this point. 

@Jon Kelly Interesting. So in your opinion, you’d take less cashflow if it meant keeping more cash in the refi? I was balancing keeping cashflow while taking as much as I could out. 

To put it into numbers I did the math on the loss in cashflow over 30 years + the 8K. If you take that subtract the money I’ll get back in the refi it’s ~25K loss. So if I understand it correctly I would just need the next investment to return over 2.75% and make net more than 25K.

Shouldn’t that check our? Also thank you again for all your help.

@Jon Kelly thank you for the explanation. This has been my logic too, but I’m glad you’ve reaffirmed it.

To answer your questions, I am aiming to keep cashflow on this property above $1000/mo and between 10-12% CoC return. So basically as long as I hit these metrics and my next investment return is net higher than the 2.75% on the loan, I cashflow a couple hundred per door, and I stay in my CoC goal range it's a win?

@Caroline Gerardo care to actually explain why? The 8K actually isn’t my issue if I make more than 8K on the next investment that money is back in my pocket. And my rate is 2.75 - if I make more than that rate of return on the next investment I should come out in the black as well. What’s your logic?

@Caroline Gerardo I should clarify that’s including escrows and pre-paids. The net closing costs not including this is about 8K - also buying down the rate a little. 

Hey all! I understand the process of a cash out refi - but what I don't understand is where the lines should be. For example, if you take cash out of the equity in my duplex what's the line for the amount of cashflow you should absolutely keep in the deal? How much of an increase in mortgage payment makes sense? How do you calculate your losses on the closing costs and lender fees? Is the strategy typically to take as much out while you can as long as you follow these parameters? I'm including my exact example below.

Current P&I: $1576
New P&I: $1837

Current Cashflow: $1272/mo
New Cashflow: $1011/mo

Current CoC return: 8.7%
New CoC return: 12.1%

Cash to close will be about 12K and I will be walking away with 75K at closing. The plan is to take this 75K and use it to buy another multi. Do these metrics make sense? Should I be looking at other metrics

Any help is appreciated.

@Matt T. if you don't mind me asking, how many beds/baths? How modern did you make the unit? And what did you end up renting it for?

I just bought in Salem and am starting to get my feet wet with the same things.

Hey BP, so I've officially realized after a few refusals and crazy offers that I need to take off-market deals more seriously. I have a leads list of 600 potential multi-family properties and the mailing addresses of their associated owners. My question is, what is the most efficient way to send these outs? Is it as simple as what I'm thinking and going one by one stuffing the envelopes and bringing them to the post office to mail? Is there a more efficient way? Also, anyone who has had success with this.. what did you do to drum up interest?

Thanks in advance!

@Cameron Whitehead Appreciate it Cameron! This seems to be the trend I'm seeing.

@Jonathan Bowen I mean there's a certain aspect of this where as the buyer you need to take responsibility for yourself. I would never offer on a property that didn't add up when calculating the numbers and didn't fit into my long-term plan. If an agent brings you a lead it's up to the buyer to truly see if it makes sense. With that said, when I find something that fits my criteria I think it's important for an agent to respond and help me complete the process of seeing the property (agent doesn't have to be there if they're busy) and actually submitting an offer in a timely manner.