All Forum Posts by: Justin Owens

Hey Joseph,

Different Strokes for Different Folks. Most will encourage leverage or debt. BUT you have to make the numbers work. Rent should cover the mortgage payment, taxes, insurance, maintenance, capita expenses etc. And ideally you would have SOME flow at the end if it. If you haven't tried the calculators try the rental calculator. Look at all the annual and monthly costs that go in. Plug in rents in the area. If you cash flow with a mortgage it should be worth a look. If you put some into a reserve account for unexpected items until your cash flow can build reserves.

Welcome aboard John! A lot of Bay dwellers look outside the area. It adds risk but affordability. Best if luck. I'm in the Phoenix area if you need some info on the market here.

I agree $100 per foot is low. 3 kitchens, 3 bathrooms and 3 w/d hookups is a lot of plumbing/cabinets. What is the finished cost per foot of other 3 plexes in the area?

Welcome Jason! This is a great community and while I don't know Pennsylvania, Arizona does have some great investment opportunities. Between podcasts, forums, blogs, and webinars you'll have plenty of content to absorb! 

@Ralph R. I totally agree with what you are saying. Generally a REI wants to maximize ROI. Given the ambiguity of the question I was trying to get the ball rolling.

Looking for a BRRRR deal using my HELOC currently. Glad it worked for you.

As much as you need to in order to make the numbers work, whether that is cash flow or the financing.

Sorry@Ralph R., the HELOC will be on my primary residence. I didn't make that clear.

@Elizabeth Colegrove That is another option depending on your strategy. Are you using the funds for a down payment(s) for buy and hold rentals? In that case your course is much better.

I only planned on using the HELOC for short term financing, like a hard money lender but I borrow against my own equity and pay it back in a short time through selling a flip or refinancing a long term rental.

Howdy @Stacy Jordan

What was the verbal offer? As a rule of thumb take 70% of the ARV minus the Rehab costs. So $82,000? Sounds pretty low especially given the rents.

Hey @Daniel Haley It's a good question.

Pros - once set up you can basically make cash offers and close quickly on any property, up to your HELOC limit. Cash deals and quick closes can save quite a bit on the purchase price for some buyers.

Cons-It may not be the best way to finance a rental property permanently given a probably higher interest rate and higher payment.

HELOCs can work with various strategies so it really depends on the road you are planning on traveling. I am closing on a HELOC in the near future for my primary residence. This will allow me to essentially make cash offers on properties. I would generally only use the HELOC over a conventional mortgage if I could get a significant savings on the purchase price.

My current goal is to secure a flip or BRRR property where I can buy and rehab it with the HELOC then sell or rent/refinance and get my money back and find another. I have a full time job and am only looking for one property at a time at this point.