All Forum Posts by: Matt Medina

@Nathan Gesner thank you for that great information! I’ll be using this to find the right property manager

Hello BP community!

Recently had an offer accepted for a 3bd 2ba SFD in Mesa, AZ with a 1bd 1ba casita in the rear.

Now that the ball is rolling on the closing process I am looking for a property manager to manage the property since I am an out of state investor. 

If anyone could recommend a management company in the Mesa / Phoenix Area. 

Thank you !

 @Jon Martin Thanks for the Info Jonathan!

 Hey @Karoline Kaon, Thank you for info! How did you pay off your Heloc or are you in the process of paying it down?

 Hey @Mitchlyn D. , Great point. to answer your question, Ideally find a property I could add some value to right of the bat. However, I only have 100k heloc to work with, so the purchase price would have to be right. Also like many of us, I plan on buying in an area that is experiencing growth.

Now if the property doesn't gain value and I am unable to pay off the Heloc, that's where I am stuck. That's one of the reasons why I'm here asking questions. Any advice on how people pay off their Helocs when using them as a down payment?

Thank you for your time

Yes that’s the plan! 
the faster I can get that HELOC money out the better. The only down side is, I only have $100k to work with . So I'd have to find a home at a good price plus have enough for the repairs. The properties are out there just have to keep looking.

Hey @Brock Dowis !

Thanks for reaching out. No I havent thought of those options. 
I just recently closed on a $100k HELOC.

My plan was to purchase a home (outside CA), currently looking in Arizona with price points around $350k. Using the HELOC for a down payment, and eventually refinancing it to pay off my Heloc. That's of course if the property gains value.
what do you mean by value projects? 

Hello BP Community,

I purchased my first property 10 months ago in Temecula, CA. Since then, my home has gained approx 100-125k in equity. 

I am now in a situation where I need to find a creative way to come up with a down payment for my second property. I won't be able to do a cash out refi since I only put down 5% on the home, and a refi would only get me to 20%. Yes, I could get rid of my PMI this way, but I plan on making this property a rental in the future and my PMI is only $80 a month. The refi interest rate would increase my payment more than $80 so it does not make sense to use my equity to get rid of my PMI. So another option I have been exploring is using a HELOC on the equity to use as a down payment.

My questions are:

Any advice on using a HELOC?

Also, Does anyone know any Credit unions in the Southern California Area that are known for giving good rates on a HELOC?

appreciate the advice in advance. 

Thank you everyone for the responses!

I currently owe $440,000 of a $446,500 loan. The house is estimated to be worth approx $550,000.

So like @Jeff Shumway @Brad Snecknerwas pointing out, with a cash out refinance with my specific scenario I will only end up with 20% of the new value. ( in this case $550,000 ) I owe $440,000 on my old loan and the new loan I will still own $440,000. So, a cash out refinance will not work, correct?

Like @Jessica Tsao and @Jeff Shumway both mentioned use the 20% to get rid of my $80 PMI, however, this would only make sense if the new interest rate doe not increase my monthly payment more than $80. Or is there an option to get rid of PMI by only proving you have 20% equity? such as a new appraisal?

Thanks again for all your time!

Hello all!

I bought my first property in Southern California this year in March. In my opinion I bought at a great time, interest rates were low (2.6%), and I got the house under asking (in CA, hard to come by). 

My future goal, like many of us, is to own rental properties. The city (Temecula, CA) I bought in is growing, safe and has high potential for rental due to the job opportunities and military base near the area. I put down 5% ( conventional loan ) with the goal to save as much capital as possible. The house was move in ready, so I haven't forced much appreciation into the home other than Vinyl fencing and small upgrades to the landscaping. However, looking at the comps in my area, 2 homes in the the same neighborhood sold for 100k more within the last month. These homes appeared to have no major upgrades over my home, which makes me believe my home may appraise for a value close to what these comps sold for. Knowing that the value will eventually go down when the market settles down, I want to take advantage of the equity while I have it! The goal with this equity would be to invest into my next property. 

My current mortgage is just under $2500. According to Zillow, they estimate I could rent my home for $2800 per month. But looking at other rentals, I would lean on the conservative side and say I could get $2400-$2600 a month for the property. Yes, this property is on the cusp of being able to cash flow, but with prices in CA, I thought I did pretty good for my first property.

So my dilemma ( or lack of knowledge ). To my understanding, if I cash-out refinance my monthly mortgage will increase due to 3 factors. The value will go up, the interest rate will increase from my current 2.6%, and my PMI will go up ( currently $80 ). Pulling out the equity would increase my current mortgage and possibly make it a negative cash flow property.

My questions are, 

1. Any suggestions on how to calculate what my new mortgage would be if I were to Cash out refinance?

2. Would the negative cash flow be worth having the equity in hand to purchase a new property?

3. Would the better option be to keep the equity in the home and buy a new property with saving money the old fashion way.

Thank you everyone who takes the time to help! 

Have a great day!