All Forum Posts by: Mel Hayes

@Christian Olivo You should start by self managing to establish your systems. Its only one property and you will learn a lot. IMO, Property management is for owners with multiple properties. When you only have one property, you account for such a small portion of their business that they pay very little attention to your property.

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San Antonio, Texas

@Ryan T. This is very, very, very simple. It is her responsibility to deliver the rent to you, not your responsibility to pick up the rent. Make her a$$ drive 40 mins to deliver the rent and I bet you the next email you get from her is how to set-up her online account.

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@Michelle Herschend I did not read his response but owning property within Los Angeles City for the purpose of income is a TALL TASK. I would not AIR bnb within the city limits. There are some great areas near the airport that dont fall within the city limits and don't have to adhere to the their dumb rules.

Inglewood is on FIRE for STR because of the stadium and its proximity to the airport. There is also Ladera Heights which is near the airport. Culver City, Hawthorne are great for STR because they are close to the airport. Manhatten beach is great but I would check their rules.

You should also look at Orange County too for STR. If I was doing STR in SoCal I would do Inglewood or Orange County (near Disneyland).

I hope you find this useful.

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@Jonathan R McLaughlin

Thank you Jonathan. Great information and advice. I love that you gave an educated answer that provided multiple outlooks. My fear is becoming underwater in debt and I've never been in a rush to scale quickly, probably why I'm not rich or broke, but I think this is a good time to take advantage of the equity and add another cash flowing asset.

1 Vote

What works for an investor who's living in Memphis may not work for an OOS investor. In your case out the country. The best zip code money wise may not be the best zip code to own property from 2 planets away. I don't know what your goals are to best assist you.

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Memphis, Tennessee

Originally posted by @Max T.:

@Eric James

I disagree with others who advise selling without more info. Who is to say it won’t double again?

Of you’re set on a refi then cash out as much as you can while still being comfortable with the debt service.

Short of saying selling is a bad idea, its definitely not the route I'm taking. The rental amounts will raise over time and that low Cash flow will increase. I don't believe in selling good properties in good areas. Just not my philosophy. There are lots of investors out there and we all have different ideas on how to invest.

1 Vote

Originally posted by @Mark Edler:

My tax-biased opinion would say to COR to whatever % leaves you with a monthly cash flow high enough to cover your reserve requirements (vacancy, repairs, etc. as mentioned before). If 50% gets your equity back out and opens up another deal, a COR with a low interest rate could put you in a better spot than a 1031, which can be tough to pull off.

Thank you Mark. I think every situation is a little different and you don't have to take ALL your money every time.

1 Vote

@Luciano A.

Wow!!! Such great points. The $100.00 is after I take out money for repairs but I totally get your point. Its a give and take to tapping into the equity for maximum amount. Your reply was very helpful.

2 Votes

Originally posted by @Joe Splitrock:

@Mel Hayes pulling out all your cash increases your return on investment to basically infinite return if nothing is invested. From that standpoint it is hard to lose. The down side is increased risk, because you are completely leveraged and left with very little cash flow. Just have reserves available to cover vacancy or major repairs. I would have at least $6000 available in cash, beyond your normal emergency fund for your regular living expenses.

Also be aware that deductibility of interest follows use. If you take out cash beyond the purchase value, the interest from that portion of the money cannot be claimed as an expense against the property. You can't claim that interest deduction until you put it into another property. Then you claim that portion of the interest against the new property. If any money is used for personal use like buying a car or paying down student debt, the interest is not deductible. Hold the funds in a dedicated account and track it very carefully. You don't want to run afoul of IRS tracing rules.

Thank you Joe. This makes a lot of sense. Thanks for sharing your expertise. I think you have made things very clear for me.

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All Forum Posts by: Mel Hayes

Mel Hayes has started 41 posts and replied 254 times.

Post: Tenant - thrashed home before vacating, no forwarding address

Post: Rookie advice for self managing?

Post: Tenant refuses to pay rent online

Post: LA short term rental (long distance investor)

Post: Is there a such thing as pulling too much out of the deal?

Post: zip codes in memphis

Post: Is there a such thing as pulling too much out of the deal?

Post: Is there a such thing as pulling too much out of the deal?

Post: Is there a such thing as pulling too much out of the deal?

Post: Is there a such thing as pulling too much out of the deal?