All Forum Posts by: Justin Phillips

@Margie Kohlhaas Just an update, I never ended up moving away from Venmo. The new set-up allows you to mark something as “Paying for a good or service”. They have it under the guise of “purchase protection”, but your tenant would need to physically click something to trigger it. So far, no issues on my side. Definitely something I’ll continue to watch closely as it progresses though.

@Michael Williams Why not just use a Heloc then? If you ReFi now to pull cash-out, you'll need to ReFi again to put that cash back on your balance and see the benefit. With a Heloc, you don't pay closing costs twice, and it's much more dynamic. You can pull that $300k only when you need it, and then dump it right back on your balance when you've recouped it. 
Rather than signing up for 30 years of higher interest first payments, get a loan that works on your terms, not the bank's. 

Options. Get a loan that builds your wealth, not the bank's. 30-Year interest first amortized mortgages were created during the great depression. Most lenders only offer those because #1 They're easy and #2 because almost no one keeps loans for 30 years, so they'll profit every time you cash-out or change your rate. 
We've been ingrained to think Rate Rate Rate, but rarely do people do the math to see that lower interest rates don't equal low interest costs. 

Ah, gotcha. Delayed financing is definitely a lower risk level. As long as you have ample reserves, and buy right, go for it! 

Hi Craig, 
In a market that's this hot, I would only want to use my primary as collateral if I found a true "can't miss" deal. The last thing you want to do is go all in, and have the market stutter. I'm building up reserves and credit line availability that I plan on deploying when the buying environment is more favorable. 

@Joe S. I read your bio, and saw you gave Jesus a shoutout. If you're a Christian involved with a local church, then I strongly recommend Samaritan Ministries Christian Medi-share. My wife and I use it, and it works out to be much cheaper than what we were paying at my last w2 job for insurance. 
Essentially you pay a "Membership" rate every month. If you have a need, you pay out of pocket (and get the cash discount) submit the paperwork, and get reimbursed. My wife and I are expecting a baby here in the next few weeks, and the process has been much cheaper and easier than it was with traditional insurance. 
Here's a link to their website,  Christian Health Care Sharing | Samaritan Ministries
Feel free to shoot any questions over.

Hi Gavin, 
I also live in Gilbert, what a couple years of appreciation! Does your cashflow number include allowances for Vacancies/Repairs etc? Unless you're putting a large down payment, I don't see any houses on the market in Gilbert that would offer any cashflow. 
If you're expecting appreciation, that's definitely something you could bet on. However that may include negative  monthly cashflow after setting those allowances for added expenses. 

Hi Salvador, you can definitely access equity in an investment property. I sent you a PM with some info on a specialized Heloc with more staying power and longer access to equity. It's a great time to lock-in that access to equity, with these inflated values. Helocs are great because you have that access without needing to pay for the equity starting day one. That way you can build that line up, and when you find a good deal you'll just write a check. 

@Susan Snodgrass Putting that "trapped equity" to work is a great start! I love Helocs because of the flexibility, and simple interest. Why only tap into $200k of equity? I'd recommend checking out a very specialized 1st position Heloc where you can set that credit line to 80% of the value of your home. This particular one is tied to a zero balance sweep checking account, so all of your deposits sweep directly to your outstanding balance, saving a ton of interest cost. It's a great way to snowball into more properties, and the best part is each additional property that's purchased of paid off using the line pays off faster than the last because of the added cashflow. Great strategy to grow quickly, without over exposing yourself to risk. 
The cash offers you can make backed by Helocs will also be a great benefit, nothing talks like quick cash!
Turnkeys usually take a lot of the meat off the bone, especially in this market. I'd bide your time, and wait for a deal, in a market where you're able to make some connections and have confidence in your long distance strategy. 

If you plan on keeping one of the properties, and they're essentially connected, I'd say keep them both. If one was 2 hours in one direction, and the other was 2 hours in the opposite direction, that would be different. It probably doesn't add too much extra hassle having both. 
If you're looking to pay down debt, mathematically it makes the most sense to start with the highest interest rate. What I would recommend would be setting up a 1st position Heloc on your primary, and snowballing the debt from there. You could set that up to 80% LTV, so $200k credit line. Roll in the property with the highest interest rate, and allow all your income to go towards paying that debt down. As soon as there's room on your line, write a check and pay off the other rental from your line. With each property you pay off, it will get to $0 even quicker than the last with the added cash-flow freed up from getting rid of that debt service.
That's the most efficient and cheapest way to get to 3 paid off homes, and you'll retain access to your equity for 30 years on the primary.