All Forum Posts by: Kelvin He

I have two investment SFH but they are under my personal name. I was wondering - if I move one of the properties to an LLC, will that lower my personal DTI to allow me to refinance the one that is still under my personal?

Thank you in advance for your help.

1 Vote

Quote from @Jordan Moorhead:

@Kelvin He Heloc?

That could work yes, but the fact remains that my property is negatively cash-flowing, and it makes me kind of want to get rid of it. Not sure if the upside of having a property in Austin is worth it.

I can't see my property appreciating more than past 600k.

0 Votes

Quote from @Jordan Moorhead:

@Kelvin He can you pull cash out and hold it?

That’s a possibility, but it would only make me even have more of a negative cash flow which doesn’t sound optimal and I got it at 4.5% interest back then.

0 Votes

Quote from @Dylan Speer:

How much debt do you have on the property?

$215K

0 Votes

Quote from @Nicholas Hyde:

Best of luck in whichever route you decide to go Kelvin. I’m also an investor in the McAllen market (and residing here), with one fourplex in McAllen and looking to hopefully get another this year. If you ever want to discuss investment strategies, the McAllen area and surrounding markets, or just want to connect with other investors in the area, feel free to reach out.

Nick

Sent you a friend request!

1 Vote

Quote from @Dave Foster:

@Kelvin He, If you've been living in that house as a house hack. It is possible that you can sell and take all of the profit tax-free using the primary residence exclusion. Your title mentioned 1031. But I doubt if you'll need it. Tax-free is better than tax-deferred :)

Unfortunately I moved out of the house in 2019, and house hacked a second house in Austin that I'm living in. Thank you for your suggestion though!!

2 Votes

I purchased an investment property in 2018 in Austin, TX.

Purchase price $225K

Cash flow -$200/mo

Current sale price $410K

I knew I was going to be break-even / negative cash flow when I purchased my first home, I was ok with it since I house-hacked and was betting on appreciation, which it did. I gained almost $200k in equity within 5 years, and only put $10k down.

Now I think it's time to put that equity to use.

I'm thinking of purchasing a 4-plex in McAllen, TX. It is a city that I believe will grow, but I believe few people out of state know about it yet.

4 Plex:

Purchase price $525K

Cash flow $500/mo

Is this a no-brainer to go ahead and do it? Or is the upside in Austin worth it to hold? I don't see this property growing exponentially anymore, and the fact that I'm currently in negative cash flow, and finally want to put this equity to use makes a lot of sense to me.

All thoughts and comments are welcome. I love spitting ideas back and forth. Thanks for reading and looking forward to hearing from you guys!

1 Vote

Quote from @Reid Chauvin:

@Kelvin He - I would personally try to come up with the cash to put 5% down without having to refi either property.

Sounds good, just wanted to check to see if there's an opportunity cost of not taking the deal, but 5% isn't a "cheap" rate to me anymore.. Thanks for the help!

0 Votes

Austin, Texas

Quote from @Jaron Walling:

@Kelvin He Your strategy is unique to other investors so don't be pressured by the responses here. If you're in Austin it's probably been a wild ride! You need to decide the time frame that matches your strategy. If you want quick cash it's time to SELL. If you want to play the long game just hold investment property #1, start cash-flowing (in the future no doubt), and ride the wave. 1031 exchanges are for experienced investors with new opportunities usually lined up. I wouldn't consider that unless you have another DEAL in the works.

Thank you. At the end of the day it is my decision but I do love to hear from others on here. Everyone is super helpful and I like other points of views. Definitely a long game player here so that seems like the move. Thanks again!

0 Votes

Austin, Texas

Quote from @Jaron Walling:

Quote from @Kelvin He:

Quote from @Reid Chauvin:

@Kelvin He - based on the numbers you gave; you can net about $7,500 more cash out of the primary. Your mortgage payment is definitely going to go up for either property with the higher loan balance + higher interest rate. You honestly probably will need the $150k for a down payment + closing costs & prepaids on an investment property in ATX, as you will probably want to put 25% down with how interest rates are.

I'm gonna go for another primary home to live in, and turn my current my primary into an investment.

I was planning to just do 3-5% down on the new primary, would this change your answer?

Hey Kelvin, the lender will require 20-25% down for the next property unless you sell the current primary.

Oh I didn't know that. How come? I thought I could just keep doing 3%-5% all the way down as long as I kept it as my primary initially and provided proof of a lease contract for my house that I'm leaving

1 Vote

Austin, Texas

All Forum Posts by: Kelvin He

Kelvin He has started 9 posts and replied 38 times.

Post: Will putting my properties in an LLC lower my DTI ratio?

Post: 1031 Out of My Property to a 4-Plex?

Post: 1031 Out of My Property to a 4-Plex?

Post: 1031 Out of My Property to a 4-Plex?

Post: 1031 Out of My Property to a 4-Plex?

Post: 1031 Out of My Property to a 4-Plex?

Post: 1031 Out of My Property to a 4-Plex?

Post: Should I refinance? Investment or primary?

Post: Should I refinance? Investment or primary?

Post: Should I refinance? Investment or primary?