All Forum Posts by: Melody Wright

@Jason Wray

Thanks Jason!

I definitely agree. No one is rich with two houses.

I’ve always struggled with understanding how the refi strategy was effective, but maybe I’ve interpreted it wrong. I have $116k mortgage on the second house. With current mortgage in place, I could likely net $500. If I refi, I could likely get $30k+ out, but the mortgage would then increase and decrease my net profit, say by $200. I would have to hope that I could use that $30k to get a third property that would net more than $200, which isn’t a guarantee so I’ve always kinda of stopped the math there.

I’ve been struggling with what my next move should be. My goal is to get out of my 9-5 ASAP, and have my real estate investments replace about $4k of my income. I’m leery of being highly leveraged, but also dreading the idea of staying in the rat race for another 10 years. Two opposing desires.

I already have 1 paid off rental house that nets appx $1000 after taxes/maintenance/vacancy/etc. I did open a $125k HELOC in order to facilitate purchasing future houses if I needed it, but I have not used it yet. It took me about 5 years to pay off this house while working my 9-5.

I currently am live-in rehabbing/house hacking a second home that will turn into a rental later this year. When rented, this should net about $500.

I’m caught between these options as I can see it:

1) throwing all effort into paying down house 2’s mortgage. Would likely take another 3 years working the 9-5, but would then net about $1000. So by year 2023, I’ll have replaced $2k of my income. Repeat the purchase and pay-off method, with each house being expedited by the additional income of the houses before, but will likely take 9 years and I will have to stay at the 9-5 to cover personal expenses. Slow, Low leverage.

2) leave 2nd house's mortgage in place. Use HELOC/personal savings/etc as down payment/rehab budget for third rehab to rental, hope for $200-300 additional income. Repeat yearly or quicker, stay at job for another 5 years or so to cover personal expenses. Year 2021-$1700-$1800, 2022-$1900-$2100, ect. Moderate speed, Moderately leveraged.

3) save enough money to cover a year or so of my personal expenses, leave 2nd house's mortgage in place. Quit job, throw caution to the wind, and use the HELOC to rinse and repeat the BRRRR strategy? Highly leveraged, fast, could bite me in the butt when the savings runs out if I haven't made enough progress.

I know this is ultimately a personal decision based on risk tolerance, but I’d appreciate any words of advice from those further along in the journey. The goal is financial freedom as quickly as possible without having 50 doors to manage that only $50 a piece.

Thanks!

I’m looking to purchase in the Fort Lauderdale area and would like to connect with an investment minded local agent.

This would be for either a single family or multi family property. I do have a property in mind that I would like to look at soon, and I have conventional financing lined up but could also get creative.

Thanks!

Good Afternoon All!  

Question for the more experienced of crowd here.  Is it possible to "merge mortgages" and if so, what are the options for doing this?

Here's the backstory. I bought a house in 2011 for $115K with a 30 year mortgage at 4.375%. I have paid down the mortgage to $70K, and the property is worth appx $170k now. Due to a job change, I moved a town over and have begun renting this house out. In my new area, I am currently renting as it was a pretty quick move, but am looking around to purchase another property. Property prices where I'm looking are about $170k. This new property would eventually become my new primary residence, and I am a veteran so there is a chance I can purchase through a VA loan with 0% down on a new property. I have about $30k in savings that could be used to pay down a loan or as a down payment. I like the idea of a cash out refinance of my rental, but that would only free up about, $100k (subtracting out the $70k I still owe), combined with my savings would put me at $130k, which is not enough for the area I'm looking at.

Ideally, if I could find a property to purchase at $170k, but finance at $225k, that would allow me to pay off the first house, essentially kind of "merging" two mortgages into one.  This would be beneficial to me since mortgage rates now are nearly a full percent lower than my current mortgage.  However it would appear on paper that I was under water on the second property, so I'm sure that a conventional loan wouldn't work.  

Any suggestions? 

Thanks!