All Forum Posts by: John Parshall

They have the option to do interest only payments. Anything above that payment would go towards principal. I wouldnt want to tie that money up for long period of time, which is why I wanted the 3 yr max before they refinance. After talking it over with my accountant, I am not going to pursue this anyways. After we crunched the numbers, it would not be worth tying up that money when it could be used elsewhere. Thx for the responses

Wanting some advice from those here that are far more experienced than I am in this area. Here are the basic numbers. I could get the property for 105k. No repairs needed. Currently occupied with tenant paying 1050 a month. There is a family close to me that can not qualify for a loan currently. I would get 5k down from them, and we would sign a contract for them to purchase the house from me. I would do the financing for them. I was looking at an 8% interest only loan. They of course would be responsible for taxes, insurance, and all repairs. They can pay me extra and it would go towards principal, or they could pay the minimum and have no principal paid. I have my primary home paid off, and would be doing HELOC for these funds at around 4.5%. Sale price to them would be for 120k, and they would have 3 years to go through bank and refinance. Is this worth pursuing? I want to help them out, but I want it to make sense for me also. Is it foolish to tie up this money for so long? Are there any other benefits for me that I am not accounting for? Maybe tax benefits or profits from them making interest only payments? I see it as a good opportunity for them to get in a house that they would not be able to otherwise. They can avoid PMI this way and can build credit until they have reached the 80%. Would love to hear thoughts and feedback.

Hello from Chattanooga. We go to Nashville often for weekend getaways. Wonderful place

I have a property that I bought with tenants in place. They had lived there 7 years and were great tenants. I raised rent to $1050/month and they signed new 2 year lease. They are wonderful tenants, never pay late, rarely hear anything from them. I believe I could be getting $1300-1350 for this property. I know there is tremendous value to long term, great tenants. I wanted to get some feedback on what you guys think is too much of a break in price for long term tenants. Where do you guys draw the line as far as raising the price and risking having to deal with new tenants and possible issues with higher turnover?  How much of a loss in potential rent income are you willing to take to keep great tenants in place?

Thanks for the feedback. Seems like good opinions on both sides of the debate.

That was my strategy. I paid it off in 3 years. I am doubting that strategy now after hearing/reading alot of investors talk about equity in a house being wasted unless you are using it. Just wanted to get others opinions on the matter. I do see a ton of value in having no house payment and zero debt as far as personal assets. I do also see argument that I am wasting that equity having it sitting there.

I will set up my question with some background info. I am married and 31 years old. I have 4 rental properties ranging in value from 135k-170k. Between these 4, I have approximately 140k in equity. I do not take any money from these. My primary residence is valued at around 230k. I have recently paid it off. With no house payment, I have bumped up my 401K Roth contributions to get to my max for the year ($18,000). I also have bumped up my health savings acct, which is completely non taxable income, to hit my max contributions for year ($6,750). I also contribute $5500 a year for Roth IRA. I give my financial advisor $1500 a month for some stock investments. I am adding to my savings acct as I go also, but it is not as much as it would be if I hadnt bumped up these contributions obviously. I am at 14.5% returns lifetime on money with financial advisor. My 401K is at 16% returns over the last 5 years. This leads me to my question. I think I know what the most popular answer will be, but I will ask it anyway. Should I lower my investment contributions and focus that money towards getting in properties faster? Should I consider an equity refinance on my primary home of maybe 150k or so and look to get in more properties faster? I worked hard to get my house paid off fast and obviously saved hundreds of thousands in interest. After listening to several episodes of the BP podcast, I am wondering if I am wasting that equity in my home. Sorry this got long winded, but I wanted to give some background info and explain what i was thinking. I would love to hear some opinions and feedback.

Thanks, JP