All Forum Posts by: Justin Phillips

That's a beautiful area, I love it up there.  
While I'm not an expert on Condo-Tel STRs, I am a finance/economics nerd. If that Westin is a stretch financially, I wouldn't recommend pulling the trigger unless it's a true "can't miss" deal. With us being at a high in both the housing market and STR demand, I wouldn't recommend stretching now.
A value add sounds like a much safer proposition given this market we're in. Nothing like early equity! 

With this loan, it's less about the interest rate and more about interest cost. When all your regular deposits and idle funds are sitting on your balance, your payoff timeline is greatly condensed. Even at that average interest rate over the last 25 years, the interest only cost will be cheaper than a fully loaded PI payment. 
My wife and I are currently putting those idle funds to work, increasing our cashflow, and when the market turns we'll simply write a check and buy the next property from our line. 
For those who qualify, it's a great financial tool to have in your toolbelt! 

I'd say putting trapped equity to work is much better than selling stocks that are doing well for you. It definitely is more leveraged, and therefore higher risk. I wouldn't leverage my primary in this market unless I found a "can't miss deal"
I’m a big proponent of a very specialized 1st position Heloc that’s tied to a zero balance sweep checking account. My wife and I set one up on our primary while it was our primary (now rental) and it’s been an awesome tool for us. That sweep account allows all of our checking deposits/idle funds to sweep directly towards our outstanding balance, saving us a ton of interest cost. We retain access to 80% of our equity. Currently we're putting some of that equity to work in the stock market, while saving more (having it work on the line) that we'll put to work when the market turns. It's nice because we don't pay for our equity access until we use it, rather than locking in 30 years of higher payments day one
 I always recommend anyone who qualifies to check it out. Best of luck in your next steps! 

@Kyler J Sloan I'm not so sure about the rental jeep idea, as it does add more leg work, cost and liability (even using Turo). I also assume most people that don't have 4x4 or experience wouldn't want to chance it. That, I think, is your marketing piece on the property! It's unashamedly not for everyone! I want to check the property out just reading this thread, I'm sure you'll get some outdoor/adventure crowd that will love it. Now I'm not totally sure about the dollar and cents, but trust your numbers and have fun with it! Take some great pictures, and join all the outdoor/camping/nature groups you can and advertise it. 

In the Real Estate Investing world we have a term for this very strategy, mortgage fraud. 
If your purchasing a property with an owner occupied loan without any plans to live there, you're committing mortgage fraud and opening yourself to fines or even jail time. This is partially why house hacking is so popular for starting out, as you can use owner occupied loans and rent rooms out, as long as you're also living at the property. Otherwise it will need to be an investment property loan, which come with higher down payments and interest rates. 

@Sean Harris If it was 3 years ago, you'll need to reapply. They'll need to complete a fresh appraisal (possibly desktop) and also qualify you for the additional access to equity. 
@Rambob Ramos Both Cash-Outs and Helocs count towards your DTI. Helocs typically hurt DTI less, as they're just interest only payments, so it's a lower monthly minimum payment. Along with that, you only show (and pay for) what's drawn on Helocs.

I'm a big proponent of a very specialized 1st position Heloc that's tied to a Zero Balance sweep checking account. With that ZBA, all regular banking deposits/idle funds are automatically swept to the balance of your line every night at midnight. So all my regular deposits work much harder than they would in any "high-yield" savings account, tax free. Along with that, there's a 30 year draw period for equity, lower interest rate caps, and more staying power with it sitting in 1st position. 

@Raj P. The opportunity cost for trapped equity is much lower than the opportunity cost for money working for you in the market. To @Dan Portka 's point, a cash-out would be bringing on more debt. I wouldn't recommend cash-out unless you find a true can't-miss deal. 
My wife and I elected to ReFi into a very specialized 1st position Heloc that's tied to a zero balance sweep checking account. We have access to 80% of our equity, but will only pay for it when we need it, rather than locking in 30 years of higher payments on day one. In the meantime that sweep checking account is allowing all of our normal banking deposits and idle funds to sit on our outstanding balance, saving us a ton in interest cost. It's been a great tool for us, maximizing both cashflow and flexibility. 

@Michael Williams If it's just trapped equity, I'd definitely recommend using a Heloc over a HML. Much cheaper, more flexibility, and then you have that line open for future uses as well.

@Maria Luna If you're not pulling cash out, refinancing a $30k loan probably isn't worth a lenders time, or yours. After the closing costs, it would be very hard for you to recoup through interest saved.
Along with that, traditional Refinancing will require 2 years of 1099 income to qualify. 
Most likely, your best bet will be to stick in your current loan. If it's hard money or a very high interest rate, a more creative financing option might be best; Personal LOC, loan from friend or family etc.

@David Garcia With this loan, you're not earning interest, you're saving interest. That's tax advantaged, because you don't pay taxes on savings. The current rate is 3.85%, which is great for checking/idle funds. When you're paying off so much quicker, it's less about interest rate and more about interest cost over that condensed timeline. 
I'll shoot you over with a PM with the info for the broker who originally introduced me to the loan, he's licensed up in Colorado as well.