All Forum Posts by: Justin Phillips

@Katie Panzica Have you looked into lenders/programs where Asset Depletion can be used? With high assets, that can be a helpful tool to bring the DTI down.

@Hernando Quintero I’d highly recommend checking out a specialized first position heloc. If qualification is there, it will blow even a 15 year mortgage out of the water in terms of interest saved, cashflow. Plus you have access to 80% (up to 90%) of equity. My wife and I got one on our property in SoCal and I loved it so much that I left my job in Medical Sales to join a company that specializes in them. It’s been a great tool for us, and the flexibility for investors is invaluable.

@Trevor Davis I'd highly recommend checking out a first position HELOC. If qualification is there, it will blow a 30 year and 15 year both out of the water in terms of interest saved, cashflow and flexibility.
The one my wife and I have set up on our property is tied to a zero-balance-sweep checking account that sweeps all activity directly towards our remaining balance. So every dollar we deposit goes directly towards the principal balance, saving interest cost. The “Payment” is an interest only cost that just gets added to the balance once a month. It’s starts much cheaper than the 30/15yr Amm. payment would be, and it snowballs, becoming cheaper every month with positive cash.
Plus it’s a line of credit, so you retain access to equity for the 30 year term, allowing you to purchase additional properties all with the one loan.

@Kevin Piwowarski I use Zillow Rent Manager for my listings. The potential client pays $29 (I believe) for background check/credit check. They only have to pay that once and it reuses those reports for any application they send in during the eligible period. That way you don't have to collect money/paper applications if you don't want to. 
I always recommend speaking with prospective tenants on the phone before meeting them in person. 
I use Venmo for rent collection. It's easy, free, and gives them payment options.  

@Blake Wilson Welcome Blake! It's a crazy market, but doing things others don't want to, like door knocking, is a great way to start. I'm happy to connect and offer any guidance I can. Cheers! 

@Patrick Walton Hey Patrick, that's a great way to begin your REI journey. That's how my wife and I started, turning our primary into a rental. We got it set-up on a 1st position heloc, allowing us to increase cashflow and retain access to equity for future investments. For those who qualify, it's an awesome tool.
To @Bob Okenwa 's point, cashflow is tough in this market. That's the beauty of your strategy though, because you're not looking for cashflow on day one. It's more a bet on Arizona and the market continuing to grow. 

@Adam Howard I'm a big fan of the 1st position heloc, as you're able to pay down your balance with idle funds, then when a deal comes up you'll simply stroke a check. That way you're not paying for that equity until you actually need it. Then the new higher balance is brought down much faster with the added cashflow from the new rental. It allows you to snowball your debt, and finance all your future investments on the same line. 

Great news for property values! I think all of us in acquisition mode are ready for Arizona/The Market to take a breather haha 
But a high tide raises all ships! 

@Matt Ziegler Gave some great advise, have guidelines set before you start your tenant search. Don't waver from them! Remember, it's much better to have no tenant for a month or two, than it would be to have a horrible tenant in your property! Be patient and wait for the tenant that will treat your property like their own. 
The lesson this situation taught you is the best kind of real estate lesson, a free one! It sounds like you're diligent and on the right track. 

@Mark Sinclair I'm a fan! They're definitely not the very most ideal property type, but who is getting their ideal property in this market? I like them because the maintenance is much lower, and there's always a rental market for them. Find a good tenant, and at times you'll probably forget you're even a landlord. If the numbers work after HOA and higher taxes, go for it!
Just be sure you know what's included in the HOA. Sometimes it can be an unwelcome surprise finding out sewage/water actually aren't included in the HOA cost. A nice, safe complex is another thing to vet out. With 100's of "neighbors" in a complex, a bad egg or two can really go a long way towards making them not a great place to live. That's another advantage to a well run HOA/PM, they should help take  care of issues in that vein.  
Let me know if I can answer any further questions. Happy hunting!