All Forum Posts by: Mikael Winkler

@Clifford Miller

Columbus attorney Michael Gefvert is active in one of the local REI groups I'm in. Outside of searching online for compliant Ohio assignment contracts, someone like him could probably guide you toward compliant contracts, or craft one. That, or reach out to some local wholesalers to see what they may be using.

I would certainly agree with @Remington Lyman and @Zeke Liston, at least in regard to the Columbus market. It seems like there are cranes everywhere, and they're pretty much exclusively building either larger complexes or high-end condos. With those high building costs, the margins need to be worth it.

I definitely think that is a feasible plan. However, like @Remington Lyman said, you'd really want to make sure these are good deals, as 5% may not be worth the risk. If lending these funds would be in lieu of you doing your own projects, you'd probably get better returns just using it yourself. Also, as @Darius Ogloza pointed out, you'd want to make sure your source lender is okay with the idea. Especially since they are family! 

Either way, seems like you have a promising opportunity. Good luck!

@Alex Forest that's awesome! Yeah, my capital is tied up in something at the moment, but I'm itching to start another rental project while these rates are so low haha

@Alex Forest

Oh wow, you were quoted a sub 4% interest rate on a rental? I knew rates were low, but I didn't realize rental rates were that low, as well. That's great! 

@Alexander Churchill

Ah, yeah if your plan is to use potential cashout money for a vehicle, perhaps a HELOC isn't ideal, as it is "borrowing" money from a property's equity. You're still paying for it. In a HELOC, most lenders will lend on 75-80% of a property's appraised value, minus a potental mortgage balance. In my case, I have a duplex that was appraised at $167,000 at the time. The lender lent on 80% of that value, or $133,600. Minus the mortgage balance of about $98,000 at the time. So, the amount of credit they lent was about $35,000. My interest rate is whatever the prime rate is, plus 1%.

In my opinion, HELOCs are ideally used in a BRRRR type situation, in which, you're using the money for a short period of time, then you're selling or refinancing out and pulling it all back out. The goal, at least my goal, is to continually recycle that HELOC money, not leave it in any property, since I am paying for it. Going back to your plans, yeah, I wouldn't use it on a vehicle purchase. Cashed out funds would probably be better suited for that. However, if using HELOC money on improving your other properties increases their value enough to refinance them and pull that money back out, maybe it's feasible in that situation.

@Alexander Churchill is there a specific purpose you have in mind for the capital you'd pull out, like more deals? If you don't need to refinance, perhaps consider a HELOC. I have one through PenFed CU on a rental, and they've been great.

Hey @Alexander Churchill! Are you saying you're into the property $35k? Essentially, $25k down, plus the $10k roof? Yeah, if you cash out refinance, and are able to pull out all $35k you have in the property, you're cash on cash would be technically infinite because you no longer have any of your cash in the deal. Most lenders won't go higher than 80% on the appraised value in a refinance, though, so be aware of that for sure.

Hey @Kana Watanabe! Welcome an congrats on starting your journey. I'm an investor in the Columbus, OH. Compared to the coasts, Columbus certainly has a lower barrier to entry and opportunity  for both cashflow and appreciation. Especially if you're willing to take on renovation projects in some of the emerging neighborhoods close to downtown.

Regarding COVID, to my knowledge, it hasn't really affected the central Ohio rental market as drastically as maybe some thought. Maybe a few percentage point lower on collections that usual, but certainly nothing devastating. Short term rentals felt it pretty heavily initially, but I think the really strong operators are on their way back to normalcy. For more detailed info and numbers specific to Columbus, I'd recommend Peter Lohmann of RL Property Management and Mitch Deminski of Solutions for Real Estate. Both very solid property managers locally.

Hope this helps and good luck!

@Peter Walther

Ahh, that is a good point. Thank you for pointing that out. Definitely something we’ll need to consider.