All Forum Posts by: John Sheil

Thanks for feedback.  I have been talking to a few lenders and will be talking to a few more.  I wasn't planning to have an llc take the loan out just create one for renting.   I have to get back on bigger pockets to research and learn all over again.  What would you recommend. If I get my equity is it better to buy a property outright or spread it over a few down payments?  If down payments, they would preferably be in my wife's name for a few reasons.   I don't mind buying outright and then repeat in a year, just Denver's market is high that all I could get is a condo and I'm not thrilled about HOAs.

thanks Jarod.   Totally overlooked the wife's commission. That is another great point.  She is going to be passed that I didn't think of this a month ago because of her broker structure. Glad to know the heloc will close. 

The renters and appreciation are exactly why I want to stay local. 

So another question I have is should I keep everything only in my name? My wife has excellent credit mine is good. I'm thinking if we buy a few properties in her name, the cash out will provide the down payment and if needed the mortgages on rentals can go in her name. (Llc name actually).

Need some advice on starting. I will be researching more but any help is appreciated.  I'm in Denver and bought my house in 2008.  

Currently, I want to refinance into a 15 year but now I'm thinking of taking 30 year and getting cash out to buy a rental property. 

I owe 190k between primary and heloc. Want to get rid of heloc which is at 6.5%. 

Wife (realtor) thinks house is worth 450k, I'm more cautious and say 400k.  I'm not exactly sure what happens with heloc if I do a cash out and pay it off (will it still exist or does it close).  

My thinking is take 300k cash out, payoff heloc will still leave me 110k to buy a rental property. I have to run numbers more but if I have to take less because heloc. I can use cash out and heloc to buy rental. 

Eventually we want to rent the current residence out and upgrade so I haven't wanted a high mortgage on it. 

In 6-12 months I would take out on second property and buy a 3rd one. 

I have really been considering buying rentals in Midwest since I have family out there and Denver is pretty expensive at the moment. But will research that more later. 

From what I have read many folks have refinanced their primary and successfully started out.  

I have read a lot previously but have to catch back up. Any advice would be great. TIA

@Bill S. Yeah, I know Montebello isn't great, but I see some potential in GVR. I would love to get a house in the parkhill area and have seen a few affordable ones on the market , but they get grabbed quickly.

@Christian Carson I am familiar with Cedar Fairmount area. I use to go to NightTown a lot, because my friend knew the owner and it was his waterhole. I use to work for the prosecutor in Cleveland Heights, so I knew the building inspector. I just hate that they go around every 2 years looking for violations on owner-occupied properties. We use to always get dinged for stupid things like cracks in the driveway.

I have only looked for property in Lakewood on Zillow and while driving around when I was last in town.

@Justin B. Definitely detracted me from the 4-plex. The duplexes have driveways, plus my fiancee's father is a jack of all trades. So a home next to him would not have been a problem. I don't know how he did it, but he converted their home to all wood-burning, because he gets free wood from work.

@Bill S. After doing some little research, I think I would like to try to invest in my area, Montbello, or Green Valley Ranch. Those areas have low home prices especially per sq. and I think once the light rail is built, they will appreciate like crazy, even if other areas of Denver go down. While I like the idea of renting out my current home, I don't like the thought of upgrading to a new home with a higher mortgage and then having to cover both if something happens. While I could get at least one rental at a much more affordable payment that I know we could cover. Doing a quick CL rent search and doing a guestimate, I could probably make 800 per month on my home versus 400 to 600.another home. My thought if I even wanted to move in a year, I would be able to use that rental income in my annual income and then have 2 investment properties.

I am still trying to figure out the financing. My credit is okay (high 600's to 700's depending on report) while my fiancee's is 800+. I have the current mortgage, car, student loans, credit cards while she has no debt. She is obsessive about no debt.

@Bill S. No I am not like with the house and also am aware what to expect with it. As far as my block, it is definitely a nice block and re-gentrified. I can't do section 8 on my home even if I wanted, because there is no egress and I have a wrap-around concrete patio. I would love to stay in park hill, but for the current prices, it would not be much of a home upgrade.

@Justin B. That is Cleveland for you. Almost all the judges use to be elected that way. I remember when I lived there, there were about 6-8 judges with same last names and two with the same name. One was a long time judge and the other ran and won, because he had the same name. Yeah, there are a lot of duplex. My future in laws live on warren and I know the house next to them was an up-down duplex which was on the market for 15K at one time. I don't know why we didn't buy that one. There is actually a 4-plex on Warren that was cheap but doesn't have a driveway. Lakewood is definitely a great area and will likely never depreciate. Taxes are a killer though. My best friend and I bought our homes for the same price. His home is in 7 hills and his payments are $500 higher because of taxes.

I will definitely keep you in mind if I go the Cleveland route. My family actually has a home in University Heights which needs some work, and I am urging them to rent it out, but they won't since they got burnt in the past renting to a family friend. I may just try to have them let me handle it, because it is just sitting there unoccupied.

Thanks Justin. I am from east-side (Cleveland Heights), my fiancee is from Lakewood. I have been looking at some properties over in Lakewood. My concern, at least with Cleveland Heights, are the taxes, but more so the building inspections. Is Lakewood as bad as Cleveland Heights where they will give you violations for anything?

Thanks Bill.

My job is stable as I work for the federal government. If I leave, it would be my decision in the future (probably more my finance's decision). I have a few friends that are renting their former homes and it is working for them. Reason why we like are place now, is that it is 3 blocks from my fiance's job and 15 minutes from mine. Yet, my fiancee is not opposed to moving. Since you are familiar, I live in northeast park hill. It is a hot spot for fix-n-flips, but with rentals it can be hit and miss as there is still a lot of section 8. However, I bought at the right time, my mortgage is low enough. I have to admit, there is also the whole attitude of "renting your home to a strange." I know I can go over it, if that is the route I go.

I agree Denver's rents will go down in the near future, that is why I am looking for certain areas of Denver. Thanks for the advice about the HELOC. I have a good interest rate now, so that is why I was considering a HELOC. But with the 5/5 at PenFed, I think that is the better way.

Hello everyone. I have been lurking on BP for some time now, but with the start of the new year, I am really trying to put together my plan.

Here is my situation. I am an attorney with stable income, but looking to make some extra income on the side. I have plenty of equity in my home that I plan on pulling out next year for a few reasons. A few of my friends are real estate agents who are also getting into investing. They are doing fix-n-flips. My fiance is likely to be one of my partners if I go into it alone. She has the higher credit score and clean slate.

1) I am deciding on pulling out my equity which I expect to be around 60 to 80K. I am going to use PenFed, but am deciding whether to use the 5/5 or HELOC. I think I may do the 5/5 as it is the lower rate. I know there is some risk pulling the equity out for rental property, but it is sitting there and I have to pull some of it for other reasons anyways.

2) I am going to form an LLC. I don't know if I should go in with my fiance has the better credit score, she has 0 debt. or should I pay my debt down and then use mine. I am sure mortgage company will use both of ours, but I also think it may be best to use just mine in case something goes wrong, her credit is clean.

3) I prefer to invest in Denver where I live, but also my hometown is Cleveland where housing is super cheap. In Denver, I would have to finance and in Cleveland I could buy outright. Also in Cleveland I have a few more connections for repairs and maybe even managing. However, there are a few areas of Denver I really want to invest in, because the market is much better. I know of a few areas where I can buy and hold for a few years. In Denver, it would be SFH and in Cleveland, it could be anything.

4) I am also thinking of maybe joining a group instead just to learn. I could join with my Realtor friends (or even people I may meet on BP). I am just cautious of mixing business with friends. I have seen it go bad too many times.

5) I would be interested in doing a fix-n-flip, but Denver's market is so tight with it now. I rather the passive income and sell later. However, my future sister-n-law is an interior designer, which I think can be helpful and I know a enough people who could do the work, so it is a possibility. The area where I live is hot for fix-n-flips, but nearly impossible to get into cheap anymore. However, living in the area, I may be able to find the inside track through neighbors.

6) One avenue I am thinking is pulling out the equity in my house, buying a new home and renting out my current house. The reason for this, is I think renting out my current home may make the most income. My fiance and I kind of want to move anyways. However, we also like our location and it is fine for use now, but we do plan on moving in the 3-5 years.

6) This is a side note, but there is a location I think is perfect for a small shopping plaza. I know I could not finance it, but would like to know what others would do. Try to find an investor and get a "finders fee?"

7) As an attorney, I would not mind getting into real estate law as another side business. While I like certain aspects of my current job, I much rather be on the other side running my own law firm again. I plan on re-evaluating where I am at in 3-5 years and may going back into private practice.

Any advice is greatly appreciated. Thanks

John