All Forum Posts by: Michael Mulroy

I have a condo that is currently being purchased on a 5 year land contract. I have had the property for 2 years, so far. Due to the short term of the contract, the property is cash flow negative but was meant to be an equity play. I now would like to pull the equity, pay off the loan and use the extra money to buy my next property. 

I have had some significant challenges due to the number of rentals in the condo community (80 of 143 units), which does not meet the underwriting requirements for a Fannie Mae loan. Has anyone had any luck finding unconventional lending options or portfolio lenders? I do have equity in my primary residence, but wish to use that on my next primary home in the next 4-5 years.

The condos are great, rent well and could cash flow around $500/mo once paid off for a purchased price of $50,000 property. I don't want to sell, but I'm starting to reconsider holding them if I'll never be able to access the equity. 

Does anyone have any ideas?

@Patrick Menefee I hear what you're saying and that's what I was thinking but the fact that it's only 3 years makes me think I should save the money for the next DP. I don't have the 33k yet, so saving on the side is what I have been doing. If I save, pay it off and then have to save again for the next DP, it'd be even longer before my 3rd property.

12k for a DP for the next property quickly, be getting an additional 200-250 cash flow and then the 3rd would drop off a 1-2 years after. 🤔

Thanks for the feedback, Joe. To clarify, I would leave the property that is cash flow positive alone and let the tenant pay while generating cash.  My question is more around the second property that is cash flow negative, but will be paid in 3 years. Do I pay that down faster or do I save for my next down payment and let that debt drop off naturally. Financially I can afford to keep covering property 2, while saving for property 3, but look forward to the big cash flow swing if it's paid sooner. 

Thanks again!

I am looking for advice on adding my next property. I currently have two condos with the following financials:

Unit 1: cash flows positive $235/mo, with about 10 years left on the loan ($23k remaining at 3.84%)

Unit 2: Land contact, negative cash flow -$400 with 3 years left ($33k at 5%)

At this point, I have been focusing on gaining equity because the first unit is cash flow positive, with such a low rate. My second unit is gaining $750 in equity a month, so it's basically been a forced savings. That said, I would like to focus on my next move. Should I pay down the 5 year note faster, to get a $500 positive cash flow on the property, so a $900 swing? 

Obviously I want to have positive cash flow, but do I be patient, keep saving for my 3rd property or pay down aggressive and then pull equity to buy the next property? Using the equity later will be a higher rate and longer terms, hence my dilemma 

Thanks!

Mike