All Forum Posts by: Mike Greenberg

I know that leveraging one property to buy another is a common discussion but I had a very specific question that I can't seem to find a clear answer to searching here and the web which is if you leverage one property (via cash out refi, term loan, or HELOC), if you can new count any/all of that debt as "acquisition debt" for purposes of deduction in Schedule E (presuming you're buying a rental).

In my case, I've been approved for a HELOC on my current primary home which has lots of unused equity, and then use that HELOC towards closing costs on a new SFH purchase that I would take out a conventional conforming mortgage on, and had been planning to just deduct the interest on the HELOC as home equity. But since that's limited to $100k, wondering if it's preferable (or possible) to count all that additional debt as acquisition debt for tax purposes.

I figured HELOC was easier, less expensive, and less painful than doing a huge jumbo loan cash out refi, so figured I'd just do that to get in the game and learn my way around, and then could just do a cash out refi later on to both pay down the HELOC and make other new acquisitions.

 Hi Aaron, thanks for responding. I'm looking in Chattanooga. Being used to the higher housing costs on the coasts I was initially excited about the more favorable price:rent ratios, but it seems like a decidedly seller's market there right now.

We'd also consider SFHs with de/attached in law units or at least a finished basement with good ventilation, although the trick is that you can't search properties by that.

Hello, I'm currently shopping (remotely) for 1, 2, and 3-plexes in Tennessee and looking for advice in particular on duplexes. It seems to be that most listings have the same basic attributes: built mid century, usually some minor renovation in the 80s or 90s, often look like they're renter ready but need some cosmetic work at least (my current tolerance for rehab work is very limited at the moment). The MLS / Zillow listings tend to not have a lot of detail, for example type of heating and cooling is often vague, whether there's existing tenants isn't often stated (although if MLS has a "gross monthly rent" figure I'm assuming it is), and there's often only pictures from one of the two units so it's hard to tell what shape both units are in, or what their layouts, features, and amenities are.

So that I'm not sending my agent to view every duplex in town (especially because I'd imagine the listing agent would have to find a time that both tenants agreed to), is there a way to more quickly weed in or out all these faceless duplexes? They're mostly right at the 1% rule of price to gross rent, and I know how to filter by neighborhood and location, but it's mostly the structure itself and what to look for (or avoid).

Thanks much!

Just curious if you have tips on lending on multi-plexes. Seems like some lenders refuse to do investment mortgages outside of SFHs, and sometimes duplexes, and most seem to refuse to count future income, so even if I could find a product, my DTI really limits my max loan size. (for background, I'm aiming to buy a property around 100-150k)

One option I have would be to take a HELOC on my main house, buy something in "all cash" for competitive advantage, then turn around and mortgage it later with it already being tenant occupied (thus helping my DTI). Thoughts on the first or second dilemma? I'd rather not have to bother with the second if I can find a lender who'll actually lend at a decent rate on multifamily, as I can just squeak under 45% DTI at a 150k purchase price at the rates I'm seeing.

Thanks!

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Curious to know this too

Thanks Jd, would you mind elaborating please on what you mean exactly by "buy the rental right and finance it out"

Hi all, total newb to investment properties here working a 9 to 5 in a high cost of living area (San Francisco, CA), and investing in an income property, and eventually moving to, a lower cost area (Chattanooga, TN) which also has much more favorable price:rent ratios than the Bay Area. The idea was to work another couple years and then "retire" to be a landlord to escape the office. We would rent out the pricey condo in SF, and then either move into our rental property in TN, or possibly just rent an apt for ourselves while we shop for a home or condo or fixer project then (in case anyone has experience doing something like that and would like to share lessons learned!). We have family/friends there who could help check out and inspect properties for us, though being out of state makes it tricky. We could just wait til we move, but we figured why not get a start on the process now to ease the transition (and cash flow) now?

Since we've seen so much appreciation here, and don't want to touch retirement savings, I'm hoping to tap a small amount of equity, less than 10% of current market value, to put towards a down payment on a house in TN.  I wanted to see if folks here thought it was prudent to tap into primary residence equity for down payment to invest in income property? If so, loan/2nd mortgage or line of credit? (cash out re-fi doesn't look economical with current rates). Is there a pain-free way to actually get a rate quote on either? I tried to get a rate comparison from Lending Tree but all I get are phone calls from people trying to upsell me (refinancing, etc. One broker said HELOCs aren't profitably for smaller lenders, they're a "concierge" service, whatever that means).

Appreciate suggestions!