All Forum Posts by: Mary Baccellieri

Any recommendations for real estate agents/realtors in the Central Jersey/Jersey Shore area? Not much luck with my last one...

Hi @Caroline Gerardo,

Definitely a long term plan/mindset here. I am not looking to quit my day job or make a quick dollar. I would like to build long term wealth. I am not banking on a tax break but if I do get some cash back even only a $1-2k, that's still a benefit to me, but again, that is not a deciding factor in my decision.

Hey @Brad Sneckner - thanks so much for your response. This is definitely a property I plan on keeping for 30 years or maybe until the return on equity falls below 9%/8% but I have a long way to go until that point so I am definitely playing the long game here. I agree, the closing costs are ridiculously high but I think because it's a special case scenario like you mentioned and because my loan balance is still very high. I know that I can write off a portion of it for my tax return so I've decided I will bite the bullet on that. I was hoping my appraisal would come in at least $870k to get to that 85% LTV and not have to worry about paying down the mortgage at all. If that were the case, I would be more a bit more gung-ho about moving forward but now that I have to do this principal pay down, it has me doing a much deeper analysis to make sure this still makes sense. I think I'm leaning towards moving forward with it especially because I would like to free up the opportunity to use an FHA mortgage again to buy another 2-4 unit property with as little money out of pocket as possible.

Hey @Jaron Walling - thanks for your input. Between renovations and closing costs for the purchase and for the possible refinance- my total invested cash = $131,500. If I analyze this property as a 4-unit (without me living there), accounting for new lowered mortgage payment, vacancy expenses, capex, etc. my annual income for the property would be $24,000. A cash-on-cash return of 18.25% still. If I don't continue with the refinance, my total cash invested is $92,900. My annual income would be $16,296. A cash on cash return of 17.5%. I agree that I think I need to consider all factors and not just look at the numbers. The scariest part is letting go of so much cash up front but I'm in it for the long haul so I also see how the up front costs now will save me more in the future. 

Hi everyone,

I am not sure what I should do here- refinance now or later?

The scenario:

I bought a 4-unit property in 2019 with an FHA mortgage that I have been house hacking. I did an FHA streamline last year and was able to reduce my monthly payments by nearly $900. Now I am contemplating doing a refinance into a conventional mortgage but I need 85% loan to value to do so. My appraisal came back at $850k and I owe ~$740k on the loan. This means I will have to pay ~$17k out of pocket to pay down the mortgage to get to 15% equity. My closing costs are $21.5k. Is it worth paying $38.5k out of pocket to save $600/month on PMI?

Other benefits of a refinance now:

-Can refinance while interest rates are low (being offered 2.99%)

-Can refinance while I still live in the property (plan on moving within a year and owner occupied rates are lower)

-Can remove my partner's name off the mortgage and make him eligible for an FHA loan in the future (to buy another 2-4 family with 3.5% down)

-17k mortgage pay down is technically money in my own pocket

-I will get a tax break on some of the closing costs paid

My thought process is that eventually I have to refinance out of my FHA mortgage to go conventional to get rid of PMI (even if I was at 80% LTV). Should I do it now to free up the option for another FHA mortgage with my partner while also reducing my monthly costs aka increasing my cash flow?

Any thoughts/tips/advice?

@Travis Watts

Nice post!! Live below your means and invest the money saved :)

Hey @Brett McManus , 

22 is really young! That's awesome, good for you :) I also agree with you about building credit early. I always knew about saving money but didn't learn much about credit until after I graduated college. Got my first credit card at 21. Yikes!

Hi @Olivia Evans

@Will B. I second Will B's comment about investing in The Bronx. There are some nicer areas where you can buy a decently priced house and get some decent rent. I bought a 4-unit property in 2019 with an FHA loan and have been house-hacking it. The property pays for itself and then some, even with me living in it. I live steps away from the subway so while it's not Manhattan, it's just a 45 min train ride away. I bought the property for a bit below market value (it ended up appraising about 20k higher than the selling price). I rehabbed the apartment that I live in now because it was really gross. I inherited the tenants (which is good and bad) and their apartments were/are decent but need some cosmetic work. I have slowly been turning over tenants (mainly because they aren't exactly the cleanest people- hello roaches and rats lol and I want to fix up the apartments and put people in them that meet my standard) so as I turn over tenants, I fix up the apartments. I paid about 45k at closing for the property and have put 40k worth of work into the house with about 15k of work left to do. I plan on leaving soon so I will be renting out my apartment and the driveway for some extra cash. Hope that helps!!

Does anyone have a recommendation for a property management company specializing in small multi families in the Bronx? I plan on moving out of my 4-unit house (out of state) within the next few months.

How old were you when you began REI and if you started when you were older ( subjective, I know ;) ) what do you wish you told your younger self?