All Forum Posts by: Jon Kelly

@Tina Lee you may want to evict the tenant before you put that in writing. You're setting yourself up for a disaster

@Gustavo Delgado I would either: 

1) sell and use a 1031 exchange. Without a 1031 you won't have too much to reinvest after taxes and fees

2) Ask your current lender if you can put a 2nd mortgage over your first. This will keep your existing mortgage in place with a lower interest rate. 

3) Find another lender and add a HELOC with the remaining equity

@Jamie Stone hard to provide any reasonable feedback without seeing the purchase price, down payment, monthly rent, expected ROI, etc.

Can you speak to someone that's used the company before? 

Do you have better options with higher returns?

I would understand your timelines better. 2-3+ years to start cash-flowing without getting the benefits of writing off the construction costs seems that a tough deal to get behind. 

@Bryan Cheng what's the point of wasting your and your agent's time by going to showing when you know the properties don't pencil out? 

You should run the numbers on properties first. Sounds like you either need to decrease the purchase price or increase the rent. Now, you can filter your search based on these parameters. Maybe filter on properties with 90+ days on market then offer 10-20% lower than asking. 

 This post should be on the home screen when everyone logs into BiggerPockets. The sad thing is most people will ignore this and continue to wonder why they can't find any deals. 

@Daisja Vance it's really simple. Having debt doesn't mean you're "in debt," or have a negative net worth. If your debt is $2m and your assets are $5m, then your net worth is $3m, despite having $2m of debt. 

@Marianne Lopez-Henthorn if they turned to private money lending that means someone is buying, correct? I wouldn't worry too much about what a few accounts on Instagram are doing. 

If you believe in real estate and the numbers work why wouldn't you keep buying? 

@Thomas O'Donnell I'm confused. What was your original plan going into this? The only difference in your assumptions is that actual rent is $150-250/mo lower than expected. That shouldn't be stretching you so thin. 

Can you move out, rent your unit for $1,400/mo and then live with roommates at $700-900/mo? 

Now is not the time to borrow more money from private investors. Now is the time to get your personal finances in order. 

@Carlos Lopes mortgage paydown and tax savings are usually mentioned as benefits but rarely factored in the equation for three reasons: 

1. they're variable from investor to investor. mortgages are always different (5-30yr terms, different interest rates, fixed/variable rate, interest only / fully amortizing, etc.) and everyone's tax situation is different

2. they're hard to calculate because they're "paper" gains. Mortgage paydown is great but you can't access the equity unless you sell or refinance. What if the country goes into a recession and your property loses 20% of it's value? Then, what happens to your mortgage paydown? Any equity "gained" is wiped away. 

3. Cash-on-cash return is a simplified calculation and translates across most properties and investors

I always keep track or mortgage paydown and annual tax savings separately from my cash-on-cash calculation. I don't do anything with these numbers when I'm analyzing new deals, but it's good to know how much equity is built up or how much I'm saving on taxes. 

@Wendy Francis why not just ask a lender for a quote to pull out $150k on your primary and a quote for investment property? Should take you 1 phone call and 10 minutes. 

The answer is likely going to be: pulling money out of your primary should be cheaper. Financing on your primary residence is cheaper than financing an investment property.