All Forum Posts by: Joseph Medina

Hey Guys, its been a while since I have been on (almost a year). Its been a fun ride. my wife and i bought an off market deal, and all it required is a value add situation. SOOOO, naturally I learned how to do tile, flooring, concerete, and electrical work, and other misc things. here in a few months we are going to have our primary re-appraised and we are expecting double (hopefully). And i want to take our equity and partner up with another investor friend of mine and buy a 10-15 unit appartment building . 

My question lies in the financing. 

From what i have read and understood when you get a commercial loan, lets say for example, a 25 year fixed rate at 'XYZ' interest rate with a 7 year balloon payment. 

Okay, so when the 7 years is up you pay back the principal and interest of the original loan, and your goal is refi into another loan, i am assuming its going to be another commercial loan with a similar baloon payment, right? and of course i am assuming the terms are lender dependant. 

i guess the question i should be asking is am i always going to be bouncing from baloon to baloon? (if that makes sense) 

Hello All, 

I am back. School is on break which frees me up a little to look at some RE deals. 

Are there any Section 8 landlords out there that can drop some advice on the topic? I have no clue what section 8 is about, nor do i know what to ask. I see that housing is going to keep going up and jobs are going to remain the same. so, my intuition thinks exactly what David said in one of the earlier podcast this year about the government expanding Section 8. So, just trying to get ahead of the curve. 

any help would be greatly appreciated. 

Hello Guys, 

So some advice or direction would be nice here... 

As you saw from the post I just posted we just bout a da** good deal and now its time for the Reno-s :). 

It is a little challenging to discuss the renovations with my wife as she is a Worry Wort and as soon as I discuss renovations she automatically goes to "this is too much money, and we can't afford it, and were going to go bankrupt, and were ruined forever" fortunately I am able to brush off my old PhD education and qualm the mini anxiety attack and return her back to base line. So, I am figuring out how to keep her calm and be part of this team that we are.

For my DIY-ers 

attached is a photo of my deck... everything on the house is original from our old landlord. underneath the deck it collects water and it sits there, my wife is afraid the deck might be starting to become unleveled, any tips about this? (PS the couch is out side because we are waiting for heavy trash day in the neighborhood LOLOLOLOLOLOLOLOLOLOLOLOL) 

and finally, in the front of my house (another picture) at the bottom of the column were the concrete paver the column sits on looks like it might be rotting a bit... and advice on how to address this too? any help would be greatly appreciated!!! 

God that is one amazing flag to fly in front of our home! <3 

Hey Guys, 

As you read some of my post I made about a month and a half ago I mentioned that my wife and I were buying a house. Well, we closed and we got the house. 

A little more on the deal

It was an off market deal. we were renting a house from the landlord and he was looking to offload the house as he had moved to Amarillo for work. 

House was built in 1979 so no worries on aluminum wiring, lead paint, or asbestos. We go the house for around 280K and the appraisal was for roughly 340K. The best thing about all of this is that there is a house in the neighborhood that sold about a year ago and a real young investor bought it and is renovating it up ( I follow her in Instagram). To me it is almost too much for the neighborhood, but the neighborhood is a solid B+ neighborhood or A-. (I would say its not a solid A because the houses are roughly 40 years old, but the community is very very well kept and clean. I believe we have 3-4 cops living in this little neighborhood and we have a Elementary school at the entrance, so it limits some unsavory characters.) So, the girls house is going to serve as a leading indicator for me to see how the market values her upgrades, because she is putting a lot of expensive rock and gold colored things in the house. However, our house has no upgrades since the time it was built, and still appraised for 340K.

Sooooo, we have a ton of value add to drive this property up. Me and my wife still have yet to decide on the future of the house. I want to use the house as a bank and use the equity wee have in it to HELOC it out to buy more property, but she is dropping hints on wanting to offload it for a profit. Being the tax conservative guy I am I roll my eyes to this, but we are ultimately a team so, we are still in the talks about it.

super excited about having this train on inch forward! 

I would figure out how much the intermediary will charge you vs how much the taxes will be. Taxes on 10k at a cap gain tax is like 2100$ not including any state income taxes. But you might want to talk to a CPA 

@Johnathon Courtot, hey bud you might be able to refi out of the VA loan, so you can use it again. I am not sure if you need to live in the property, but if you do you can do the ‘"move-in flip" or "move-in rent" model, if not boom you have a rental you can utilize! 😎😎😎 this thread has been awesome!

@Jason Wray and @Andrew Kougl, MAN THIS IS GREAT!! you two are providing two sides of the coin that I needed to see. I mean I guess the route I would take is that if the property is more of a BRRRR maybe a cash out refi or HEL would do the trick just make sure there is enough cash to be able to finance the hole project and if it's a turn key property maybe use a HELOC as the down payment! Man I hope people add more to this thread

@Jason Wray, I guess the reason would be if I didn’t get as good of a rate as the current rate I am financed at, but after reading your post I think I will look into the cash-out refi as an option then 😎😎😎 thanks a million! 

Ps man i am NOOO cpa this is just advice I have read and been told 

I am commenting so I can be updated… the only advice I can offer bud is when you do your HELOC open up a separate bank account move the funds of the HELOC into your private account and then transfer it into the account for the Duplex that way when it comes for taxes you can write off the interest payments for the HELOC. If you don't either you will not be able to write it off or you will subject your personal finances to an audit IF (and big if) the IRS audits anything. It's one of those things you where keeping your stuff separate benefits you in the long run.

Again bud that’s a big BIG if, about the audit thing!