All Forum Posts by: Luke Siecinski

Thanks, @Jeff Shumway! Finally clearing the air for me! Looks like I'll need to find some other way to come up with money for an initial investment.

Hello! I'm trying to tap into the equity in my home to hopefully start investing in real estate but I need help calculating how much cash I could actually pocket if I did a cash out refi.

I purchased the home for 200K but it's now worth 235k. I did a 5% down conventional with PMI on it, so I owe (according to my loancare.com account) about $186k still on the home. This means I have about 49k in equity in my home correct? Here's where I keep getting stumped on different google search results. How much of that equity do I actually get to take advantage of? I've read that I can typically take 80% of the equity, so 39k-40k. Is that true? But I've also read that the new loan for a cash out refi can only be up to 80% of the homes value, and you take the difference of the new loan and the amount you currently owe and that's the cash you have available. So that would be 235k * 80% = 188k - 186k(what I still owe) = 2k. Obviously both these scenarios present two totally different outcomes so I'm just trying to officially figure out what it is so my brain doesn't explode. Thanks in advance!

@Avery Carl I appreciate your feedback! I listened to the BiggerPockets podcast episode you were on and was hoping to get your perspective since you're an expert in the Gatlinburg area. I'm assuming arbitrage is tough for the surrounding areas of Gatlinburg as well like Sevierville and Pigeon Forge? 

Hey there! My name is Luke Siecinski. I'm looking to get into real estate investing and would appreciate advice. I've been researching rental arbitrage for several months, then discovered Bigger Pockets and realized real estate investing in it's traditional sense is more tangible than I thought. At the beginning though, I think I want to still go the STR route. I live in Nashville, and I am looking at properties/units in Gatlinburg, TN to start since this is a proven profitable vacation rental market. The goal is to work out an agreement with a landlord/property manager where I would essentially be the tenant or person managing the property and with consent list the property on Airbnb on a short term rental basis, paying the property manager the monthly rent and keeping the rest. My inexperienced plan is to start with two or three STRs to generate enough cash flow to then use to start investing in real estate (probably here in Nashville) whether that's fix and flip or BRRRR or buy and hold (not 100% sure on my niche yet). I've been engulfing myself in information whether that's podcasts or books to learn as much as I can. I'm in the middle of reading How to Invest in Real Estate for newbies, and if I've learned anything yet it's that you just have to do it. I realize this is a bit unconventional, but in my brain (again, inexperienced!) it makes sense for me financially with the money I have saved to do the STRs first because of lower start up cost (furnishing/deposit) and not having to come up with a down payment. All that to say, I am a 'newbie' and am just learning the ropes. Does this make sense? Should I switch up my approach and if so, how? What recommendations would you have? I appreciate having a community that I can come to and ask questions cause truth be told I'm not sure if this is a dumb idea or not! Looking forward to your responses. Thanks!