All Forum Posts by: Marco G.

Daniel Sabato why don’t you try living upstairs and renting downstairs?

The best analyze this we need to know how much you would net at closing. Once you know that, determine how long it would take you to cash flow/profit that amount. Based on what you’ve described it’s not a good investment property bc every time something breaks or you have a vacancy you are out of pocket. Determine how much you would net and whether that can get you into a better investment, whether it be real estate or not. That the purely logical analysis.

If all of it rolled over and you had no boot you would not pay any depreciation recapture. You are rolling over 70% of your gain. I am GUESSING you may then be required to recapture 30% of your depreciation, but I am curious to see what the experts say. Re the CPA, you want to make sure you are talking to someone who deals with 1031 on a regular basis.

If it is a HELOC it has a draw period and a repayment period. Make sure you read everything closely. From what you’re saying it sounds like you have a 10yr draw period. I would not automatically assume the equity lock option is for a 10 year period. Double check that. If it is indeed a 10yr lock at 3.99 that is absolutely a phenomenal deal. I have a HELOC with an equity lock option but it is for various durations. There is a 5, 10, and 15yr lock option. And each term has a different rate (longer is higher). Just make sure you read all the fine print.

Michael Plaks unless you 1031, where you can take it and never give it back 😃

Krishna Chava what was your reasoning for choosing a callable loan? That would make me very uncomfortable.

If the numbers work and you are confident you can cover the cash flow in a bad situation then do it. You have to run the numbers and evaluate your comfort level. No one can answer this question but yourself.

I used HELOC on personal residence as down payment for a multiple duplex purchase years ago. I was a “seasoned landlord” at the time, meaning 2yrs of LL on my tax returns, so I was credited 75% if current rents (they were all occupied) toward my income in the DTI requirements. All conventional 30yr fixed 25% down loans. This can be done. Just make sure you have the cash flow to back it up if things get difficult, otherwise it could get interesting. As a side note, my HELOC has a fixed rate option where I can lock in a rate for 5, 10, or 15yrs. They used the 15yr payment plan to calculate DTI.

You need to review the terms you agreed to in your lending paperwork. It’s all spelled out there, including how to remove it. Refinancing is going to be your easiest and quickest option, assuming you can appraise at the right level to have 20% equity. Most Conventional loans have a minimum 2yr PMI term, after which an appraisal and application and result in removal of PMI.

You will be fine. This shouldn’t deter you from purchasing this property. You have demonstrable savings ability and discipline. I say do it. If you hit a speed bump I’m confident you can overcome it from your statements. Good luck!