All Forum Posts by: Khadijah Celestine

My boyfriend and I are trying to decide which investment is better dollar for dollar. Neither of us are investors yet. However, we both agree it may be more of a hassle to invest in a building but he believes dollar for dollar, you would make more money with a vacation property. We've been using rent-o-meter + loopnet to look at apartment building numbers and airbnb + realtor.com to look at vacation rental numbers to answer the following:

If you had 1 million dollars to spend, anywhere in the us, would you buy a vacation rental or an apartment building? 

I want your opinions. Which investment would you choose? What would be your ROI? What are the rough numbers you are using for calculations? What occupancy / vacancy rates do you use for apartments (90%?) and vacation rentals (50%?).

Thanks in advanced,

Khadijah

I have bad credit. I currently pay $1500 a month in total debt and have finally reached a stable enough place where I can put an extra $900 towards my debt. I have $18,000 in high interest debt that I would like to get rid of ASAP. The other debts are my car loan and student loan which together are $800 and I have no problems paying those off slowly. I also own a Baltimore row house free and clear. 

I had a hard money lender come and view the house. All fixed up, he'd loan $25,000 on it for 5 years @ 18% interest. ($635 a month). I applied for a heloc at a local bank. Because of my income and DTI, I was conditionally approved for $25,000. I was later denied because of my low credit score. My only joint applicant does not have the required 700 credit score needed from the bank. They require a 700 credit score since this is an investment property and not my primary residence.

My goals are to get the heloc, finish renovations on the baltimore house (about $6,000 but I'm budgeting $10,000), and then use the rest to reduce the high interest debt until I can pay it off.

$25,000 heloc

-$10,000 renovations

-$15,000 high interest debt

I'll have $3,000 in high interest debt left and a renovated rental I can rent out.

Assuming I break even on the rental and it covers the loan and the maintenance, this lowers my monthly debt payments to $800. I'll be able to pay the extra $3,000 in two months and will be BAD-DEBT-FREE!! I can then use the other $1600 to pay off the heloc, pay off my car loan save for a house, not sure what I want to do yet.

My questions

1. I'm wondering if it's ok to apply to bank after bank after bank until someone will give me the heloc. 

2. If I do get the loan, what should I do with the extra $$$, I'm thinking save for a two-family primary residence so I can rent the nicer side out but I'd be curious to hear other suggestions.

If I don't get the loan, it'll take me a year to get rid of the high interest, but that will be another year the baltimore house is sitting empty. 

I know in Maryland you can search the land records is there something similar in Virginia? If not, how can I find out whether or not a property was mortgaged or bought cash in Virginia?

Thanks,

Khadijah

This is so motivational. And really thoughtful actually, I appreciate you going the extra mile to include links to all the posts so when ppl are reading this years from now, they don't have to sift through comments to read the series.

Looking forward to it!

"The fastest way to get rich is to get rich slow" 

Nice! 

Thanks for sharing!

If I'm living in a house under a rent-to-own contract does it count as an interest in real estate? Specifically for the purpose of qualifying as a first time home buyer, assuming the qualifier is "does not hold an interest in real estate"? Since I have an "option to purchase" contract, this counts as interest and will disqualify me?

WoW! Congrats to you and your family for all of this patience. You really need to write a book about this. 

This looks beautiful! Really beautiful actually, I think I want to move to Florida next. Thanks for the real numbers. I can't wait until my first flip.

@Mario Ortner  I moved to Baltimore to get into Real Estate Investing and it's certainly block by block. I'm not financially ready to flip but I'd like to get into it one day. On your visit here I'd suggest trying to go to a meetup or two. The following meetup lets it's members visit a finished flip every month. I've been to two of their meetups and sometimes the investor explains the deal from beginning to end. It's always encouraging and eye opening. Good luck and congrats on taking the first steps of research!

https://www.meetup.com/rehabberprobaltimore/

I understand how transactional financing works with the whole AB closing and the BC closing with the wholesaler/investor being the "B". But, when your C buyer is financing via a mortgage, how is it that you can have them lined up already? When would they be able to agree upon a price with their lender? Do these kind of deals only work when the property is not on the MLS?