All Forum Posts by: Joseph Lunstrum

We started our foray into investing about 6 months ago. Due to a death in the family we relocated to a relative's home and started renting out our starter home that has an FHA Loan at 6%. For the few months, I've been reading as much as can about investing in real estate. Over the summer, I talked to a friend of mine about flipping. I started visiting websites and forums. I looked at Lifestyles Unlimited, then looked for my local REIA's and then I stumbled upon BP. And I'm glad I did. I've gotten more free advice and knowledge here in a few weeks than I would have poking around the internet for months on end. I feel like I'm part of a community of people who are tired of relying on their 9 to 5 to make ends meet, and want to live life on their own terms, create a legacy, create financial freedom and work hard to do it. During my research time, we have been steadily collecting our rent payments and putting them into a separate savings account. I have one concern that I feel we must take care of before we can begin or move to the next step of our investing journey, which is refinancing our FHA loan to a conventional at a lower rate. I want to do this so that we can free up some cash flow in that rental payment. The value of our home has increased every year since we purchased and I see it continuing to increase. I want to take advantage of the low rates before they start increasing. I see this as our first step because it will get me out there talking to banks and getting into the finance area of things. Just wanted to get this out there. It's kind of a manifesto for us now that it's on the screen all typed up. Thank you to all who have replied and answered my questions about this career changing experience!

Hi Jerry and Welcome!

Our situations are very similar. My wife and I have little experience other than purchasing our own home and now renting it as an investment property. I, too, would like to one day "retire" from the traditional working world. We are both teachers and it gets difficult at times. I'm sure it is for everyone. That having been said, we also understand it won't be something that happens overnight. So, I've started looking at all the free advice here and posting when I can. I've watched some free webinars and I'm going to start listening to the podcasts as well. The education section has great material for newbies such as us! Good luck and welcome!

Not sure if I'm posting this in the right forum but here goes:

I'm trying to refinance our starter home. It is a FHA loan. I want to refinance to pay the home off sooner and free up cash flow as we go. This is our first official buy and hold property. I have a couple of questions. Right now our cash flow is around 200 a month. We are saving the rental payments in a separate savings account and we are planning on reinvesting that cash into another buy and hold property somewhere down the line. If we use the refinance to pay off the FHA loan on this house, would we be able to use an FHA loan to purchase our next live in home? I've heard this to be true and would like some info on this. Second, would having a couple of investment houses keep us from obtaining a FHA loan? Thanks.

Thanks for the help Kris, Jerry, Jeff, Steve, and Gonz. I'll be sure to reset my search to those areas and price points! 

Thanks for the welcome Mark, and thanks for the helpful info Richard. I've looked up the REIA's for San Antonio and I've found SAREIA, Alamo REIA and SARENC. The SARENC gets blocked by my spyware software so not sure what's going on there. The Alamo REIA is the only one that says they are affilliated with the National REIA. Not sure if that really matters. So, Richard, it sounds like the Buy would be from our cash or small loan of 20-30k for the downpayment and any rehab (16k on a 80k property plus rehab costs)? That would then create a mortgage of 64k plus closing costs and then we would refinance that 64k loan sometime down the line after I had rehab-ed, and rented the property for a few years right? In order to help pay down the small loan I had for the 20-30k my ARV would help with that as well, assuming I did my homework correctly and get those rehabs to increase the value to 95-100k. Once I refinance where would I pull the 16k from? Or am I totally missing the concept of cash? Am I getting the gist? I tend to overanalyze things and get into analysis paralysis quickly.

Here's my intro everyone. I am a 35 yr old public school music teacher.  I've been teaching for 10 years and had what I would consider to be extremely limited exposure and experience to real estate investing. 

My wife and I have lived in our new build starter home for 10 years. Recently, her father passed and set events in motion. We now live with her mother in her 4/3 SFH and are renting our starter home out.

This move, is what got me interested in real estate. We gradually moved in this past spring, a few boxes here and there, cleaned out a few things from her mom's house, sold some things here and there, cleaned up our house as we went, then did the big move right after school let out-beds, furniture, bookcases, etc. For about 3 weeks, I went over in the morning and either moved trash to a dumpster, or transported items to our new home. During these 3 weeks, I would also schedule work to be done that I couldn't do myself. We had someone come and make the house move in ready, we had a contractor come and patch some minor things, had the carpets shampooed, replaced a dishwasher. I tidied up the yard, trimmed the trees, power washed the driveway, etc. We found renters pretty quickly and we vetted them ourselves, asked for references and the like and to date are very satisfied with them. All of this was completed by the end of June and from then on I've toyed around with the idea of doing this a few more times, maybe more.

I've been researching online, looking for free information. The last thing I want to do is pay someone to give me information that I can ask or lookup on my own. Problem is, I am starting to get lots of free info but I don't feel I'm any closer to developing a plan on how to purchase another buy and hold rental property with little or no money down. We do have 401k's but that's not something we're willing to touch at this time.

I've read several places on BP about BRRRR and was thinking I might be able to use this strategy on our first rental (our starter home). We've Bought it (10 yrs ago using FHA loan), Rehab-ed it (when we moved out, many things were like new so not many things needed to be done), are Renting it, and I was wondering if Refinancing it would be a good first step to take towards Repeating. I believe if we refinance we can get a better, lower rate and lower payment which would free up some of the rental price for cash flow. How does this help us Repeat? I think I'm missing something with equity. We do have some equity, around 20000 I believe, but wouldn't this be a HELOC? All of this is confusing to me. I would definitely appreciate some guidance. Thanks!