All Forum Posts by: Joe Szymczyk

Not paying off debt so you can keep a tax deduction is dumb. 

Not investing further because of/ or being afraid , of interest rates that MIGHT be 1% is worrying about the wrong thing. If an extra $80/mo on a hundred thousand property is going to make it a bad deal (reduced year after year, and BONUS, more of those tax deductions you were looking for.) then it’s a bad property to buy. 

You have gotten at least 5, maybe 10 workable ideas and shot them all down, if you didn’t want answers don’t ask the question. If it was all theoretical and your not close to 10 yet anyway then don’t worry about it. If you are, you should have enough experience to know how to make at least 2-3 of the answers work. And good news, you only need one. 

And at least you won’t complain about losing a tax deduction for paying off a mortgage in the same post that you say you don’t want to pay a SLIGHTLY higher interest that would generate the same tax deduction you said you didn’t want to lose. 

Many of us made money with rentals when he interest rate was 6% or higher. 

Ps. One more “answer” for you. Buy a new primary with the lower interest rates offered and rent out your old place. Although realistically these days you should probably pay off your primary as if you play the tax game correctly you probably won’t have enough personal deductions to exceed the standard deduction making your home mortgage interest non-deductible. But a workable solution if you haven’t gotten that far yet. 

You can get up to 20 by putting 10 just in your name, 10 in spouse's name. 

After that, the following loan types are not bound by Fannie rules:

- commercial.

- portfolio. 

- non-qm (a subset of portfolio).

- hml.

Don't know how much equity you have in the properties but if you refinance some of the properties, could you pay one off? The paid off one would cash flow enough to carry the others. ie, look at the whole pile of properties as a whole rather than needing every individual property to cash flow.

@Joe Sz

Are the properties all in one geographic area ? You can likley consolidate them into a single commercial style loan, freeing you up from the 10 property constraint.

He may have not been using a different definition of “portfolio loan” then I was. There’s a definition that means cover several properties with one loan (another option I didn’t mention before where the rates could be higher) and the definition I meant. (Honestly, sometimes referred to “in portfolio” rather than just portfolio.) It means a loan that the lender keeps and doesn’t sell to the government. This should not be a higher interest rate, it would be the same or lower as the local bank or credit union is planning on keeping all the interest. 

If you cash out it doesn’t matter if the rent covers the mortgage. Imagine you go from $200/mo positive to $100/mo negative but in exchange the bank hands you $100k. That’s a pretty good deal for you. Eventually rents go up and you can cover it. Meanwhile you’re borrowing at a very low tax deductible rate. Probably less than net inflation. 

@Joe Sz

Would it be possible to refinance and consolidate several properties into a single commercial loan, freeing up some spaces?

Can you get a decent 4plex for $500k or an 8plex for a million in your area? 

Are all 10 properties still close to 80% LTV or could you cashout refi a couple of them to buy another property?

Do you have any/many listings for owner financing in your area? (A realtor could search for that.)

Do you have any accounts at local banks or credit unions where you could talk to the bankers to see if they sell their mortgages or keep them in house? (Portfolio loans)

Anyone you would trust as a partner if you brought the money and they brought the loan?

Do a 1031 exchange of your cheapest 2-3 properties for one more expensive property to open up a couple slots. There’s no reason to use up the 10 with loans under $200,000 each, so that will carry you to owing $2million. Then you can start looking at local banks/credit unions for portfolio lending. 

Mostly saying don’t get a bunch of $100,000 loans.