All Forum Posts by: John Malcom

Can't thank everyone enough. Everyone's advice was helpful especially your's Chris. I will have to remember this averaging the cost of each dollar financed info.

Thx Caleb,

Yes the paid off SFR is being rented out and the 200k property would also be rented out so basically I just use the higher interest rate which will give me accurate numbers when calculating deals?

Ok this one might be hard to explain...

I want to either refinance my paid off SFR or get a HELOC so I can buy a rental property. So far I have determined that my rate at least for a refinance will be about 5.25 for loan. Lets say my house is worth 100k and the LTV on the refinance is 70 so I can get 70k out of it to put towards a rental property.

Now lets say I find a rental property worth 200k and put down my 70k on it and finance the rest (130k loan). Also lets say the rate on the 130k 30-year fixed loan is 4.25. Finally here comes my question:

When using the BP rental calculator, I am unsure which loan rate to put into the 'interest rate' field on the calculator. In this scenario, the rental property's loan (130k) rate is only 4.25 but the SFR that I get the equity out of is 5.25. So which interest rate do I use to figure out if it's a good deal to buy a property or not? It's either 4.25, 5.25, or do I add them together since I am essentially paying two loans. I can't imagine being able to find a good deal that allows to me to make good cash flow and pay off 9.5% in interest. Help!

Didn't want to hijack the other post so I'm posting here. I've just started renting out a house I own which is paid off. I made the mistake of taking my work salary every month and paying off the house in 3 1/2 years instead of investing the money in new properties. Now that I understand the importance of leveraging debt and want to refinance the house (heloc?) to get my 75-80% of appraisal value of the house and start getting some more houses. I called my current lender for the house I live in now (30 year note) and asked if they can assist me. 

They said yes but the rate would be 7.5% since it's not my primary residence. Normal rates right now are about 4.5%. From what I've learned when you cash-out your equity like this, you are going to pay an additional 1% over the normal rates. So in this cash I could expect to pay 5.5%. However, paying 7.5% because I don't live there isn't going to work.

I've only called one place so far but I can expect to pay an interest rate as high as 7.5% percent just because I don't live there? If that's the case, I will have to either use private money or mine own. Will I always have put 20% down if I don't plan to live there? I'm looking into multi-family (2-4) residential (for now).

Many thanks and sorry for my grammar.