All Forum Posts by: Matthew John

@Diana Borova Glad I could help! It's very much like a credit card. 

@Andre Pinheiro Thank you! Great to hear!

@Diana Borova So the Appraiser comes out to review the valuation of the house. I showed them all the BEFORE pics & wrote down a list of all the work we did. 

They then look at comparable properties and the surrounding area to determine the fair market value of the property. 

It came in at 115,000 and most banks will let you do a cash out refinance or a HELOC of 80% Loan to Value.

So they take 115,000 x 80% = $92,000 - $53,800 (amount owed on my existing mortgage). This equals $38,200 in equity I'm able to access. 

Instead of doing a refinance and increasing my monthly payment, I decided to open up a Line of Credit (HELOC), which gives me a $38,200 credit line which I can use for pretty much anything. I only pay interest on what I use and I don't use it, I don't pay anything.

HELOC is usually only done on your primary residence so most people do a Cash out Refinance, which would give me the $38,200 lump sum, but would also increase my monthly mortgage payments based on a $92,000 loan.

@Michael Ealy You're right. It's kind of my own hybrid. I decided it's best not to REFI, either. Rather I am going to HELOC to tap into equity.

Buy, Rehab, Live, HELOC, Move out, Rent, Repeat

haha 

@Iven Stevenson Great to hear! Thank you

@Christine Krizenesky Thank you! Keep moving forward, but be careful not to chase a bad deal just cause you want to get started. 

@Blayne Williams haha thanks!

@Patrick Menefee Appreciate it that's great to hear!

@Mario Leon It's exciting to see how it turned out and proves the strategy can work with the right deal. 

@Evan Parker Thank you! It helped to have a good woman in my life! She had Pinterest for a lot of the ideas, but I let her pick out most the stuff and I just managed the money and stuck to the budget. 

We definitely splurged on stuff we didn't need (barn doors in Bedroom, shelving, brand new appliances, and building the kitchen table...but we wanted to add a more personal touch since we knew we'd be living here for the next year. 

If it was just a regular rental, we probably could have saved $3000 - $5000...but I do think the appliances/dishwasher added some value as the Appraisal did make specific comments on that. 

@Daniel Mendez I went through Summit Funding, which is a smaller lender...but they actually flipped the loan to Chase about 2 weeks after I closed. 

This was my Realtor's recommendation and it was pretty expensive to close and they gave me a higher interest rate than the Duplex I purchased shortly after. 

I went back and forth about Refinancing or not and I decided it would be best to HELOC. Since I'm living in here currently, I was able to HELOC whereas rentals it's much more difficult to get a HELOC. This keeps my PITI low and I get access to that line of credit when I need it, whereas if I don't use it then I don't pay anything. So I'm going to keep that as a backup if I'm not able to find a private investor for future deals.

I honestly didn't expect the property to come in that high. I figured it would be around 100k based on the area and comps (my realtor did too), but in the past 6 months this market has really boomed and I guess the homes have increased about 15%, so it came in higher than anticipated. 

Being a 2 bedroom, I know it won't rent for higher than $1000/m, so I'll keep my monthly payment as low as possible so make sure it cash flows. When I buy a property with the HELOC, the cash flow should cover the HELOC payment.

@Scott Marshall Thanks! Vinyl was pretty easy, but became a pain when trying to get it around doors and in the closets. Took us 2 days to complete the house and we did it ourselves!

@Sean Sloop Congrats! Great area there too by MSU. Cash is ideal, but I struggled (and still struggle) finding people with enough money they are willing to invest. 

@Michael Hayes Thanks!

@Ehsan Rishat Thank you! 

@John D. Thanks! I purchased August 31st 2018, rehab took a month & I didn't even know I could get PMI removed early. Probably could have done it sooner, but I just got the Appraisal back last week. I started the process in mid February.

@Marisa R. Thanks Marisa! I haven't ventured into Detroit yet, I prefer the areas surrounding. But we should connect if you're buying down there because I have gotten some investors calling from my direct mail campaign with properties in Detroit that are looking to sell. 

@Max T.Thanks! You can't see in the pics, but in the living room they had to cut out about 4 feet by 2 feet of the flooring to access the pipes because they froze before we bought the house. They ended up replacing the pipes, but the flooring didn't look great with how they patched it. 

Vinyl plank was a bit more expensive than other choices, but we installed it ourselves & I was sold on the life proof and scratch proof. I figure this will be durable enough for when tenants eventually move in.