All Forum Posts by: Matthew K.

Hey Jack. You inquired around me looking off market in a post. I would like to look off market as well. Let me know what you are thinking.

Thanks,

Matt

Thank you for your replies to this question.  Much appreciated! 

Team,

I am in the process of closing a refi on a property in PA.  After close I intend to use this property as an investment property.  Is it as simple as just fileing as a rental instead of a 2nd when I do taxes next year?  It will be a long term rental.  Thanks, Matt

I am buying MLS properties unless I get lucky and stumble on something off market. Nothing identified at this point. I am monitoring listings daily and networking, no targeted marketing currently underway. I am at the appraisal step on the 2nd home in PA which will essentially provide the funding for the NC investments.

Thank you Stephanie, Sean, and Brian and Katherine for your replies.  I appreciate your insight!

Hey Team, I have a 2nd in PA with approximately $275K in equity. I am approved for a 80% LTV HELOC, rate moved from 4% to 4.75% on 7/1 and will continue to move with the fed. I am also approved for a 75% LTV cash out refi at 5.875%.

I intend to use the proceeds to invest these funds in the Charlotte market, likely 3 to 4 unit multi's. Not much difference in cash availability between the 2 products. Obvious rate stability in the cash out refi has me leaning that direction. Only reason I am considering the HELOC is the great rate, maintaining current 4.25% on 15 year conventional with 11 years left.

Please provide me perspective that I am overlooking or should be considering.  What is the best way to compare these two options?

Target is to cash flow $15k monthly in the next 7 years.  

Much appreciated,

Matt

  

Hey there BP forum! I hope you are all chasing your dreams and making things happen. I need some direction or advice on best approach to funding my first investment property. My rookie REI journey has provided me numerous situations where analysis paralysis has eaten up a great deal of time and progress, I'm there again. I am looking to do a cash out refi on a second home I own in PA to invest in Charlotte, NC.

My credit and income are good to go and do not create any barriers. The below is based on refinancing from 11 years remaining on a 15 year note at 4.25%, $1860/month PITI.

Conventional Lending: 

OPTION #1 5.375% on a 30 yr. at 60% LTV providing $130K PITI $2178/month *** No appraisal needed

OPTION #2 5.875% on a 30 yr. at 75% LTV providing $185K PITI $2563/month *** Appraisal needed

I found a quadplex for $505K with positive cash flow. I backed out the monthly note, 5% for vacancy, 5% for break fix, and 8% for PM and net out $650/month. I could pull this off using OPTION #1and have this one location to kick things off. Or, use OPTION #2 and buy a 3/2 SFH in addition to the multiunit. I likely would be net neutral on the SFH but garnering the potential appreciation of the Charlotte market.

Here are my points of contemplation:

- I don't want to overextend myself by taking out the 75%.  When it is all said and done the new mortgages on my 2nd along with the multi unit and the 3/2 would be net neutral.  I am okay with that but would be digging into my own pockets for those surprises that present.  

- The refinance process is a nuisance and costly. If I am doing it now I may as well take full advantage of it and pull out as much as I can.  Downside is that I would be $700 more per month out of pocket.

- Having 40% equity is nicer/safer than 25% equity.  My parents live in the PA property so I want to ensure things stay copacetic.

- Appreciation on 3 properties has a great deal of potential upside.

- If I don't do it now it sets me back from scaling up in the future.

- Should I be considering alternatives to conventional lending?  Between my primary home and 2nd home I have about $625K in equity with great credit and income.  The quadplex is fully rented with leases and deposits that convey.

I believe David Greene would be all in.  Am I wrong?  I don't have an overly specific goal as things sit today due to the general uncertainty of the financial environment we find ourselves in.  I do however want to scale up responsibly while embracing a sense of urgency.  I feel pretty confident that the market here in Charlotte will be pretty stable and continue to grow.  I am in my late 40's and want to take advantage of my resources.  What thoughts do you have?  I would love to hear a few perspectives.  With Great appreciation!