All Forum Posts by: Nazz Wang

@Leo Don really great to start thinking about things young. The snowball effect is real. Best luck with everything. 

Warren, so now you'd better find a place to invest that 27500 that will give you higher return then your mortgage interest, right?

You only took out 60000 for the original property, the extra 27500 is for some other property, right? So, don't let that money burn a hole in your pocket and don't spend it on a tropical vacation. Invest it wisely.

i second. I called a lot of people and flew out to meet them. Also did research on what management company is most active in my target neighborhoods. Don't go for the cheapest. Good managers come at a price but they will save you more money in the long run .

@Leo Don

To be honest, and i dont mean to offend, the reason you are asking this question is because you have never been a landlord before. Once you do a couple, this extremely slow rate of growth is just not going to cut it. Hopefully you are still interested in REI after a full market cycle of about 10 years, and if you are still in the game, you would have refinanced or bought investment properties or what not. In some years you will have a family and kids and will hopefully make more money, so your standard of living will increase drasticly and you will most likely want your own space and move to a better school district. The list goes on.

So, I would personally focus on one thing at a time, because you won't be doing the same thing for the next ten years. You will get richer and smarter... :)

When you are cashing out, you can only cash out your equity, which equals to 

What the property is worth now - your current loan balance = equity.

So you will never be able to cash on money you don't have on paper.

you are replacing your existing mortgage with a new mortgage when you are refinancing, doesn't matter if you cash out or not. Lenders always prefer to be in first lien position, meaning, if you don't pay your mortgage, they have your house. escrow uses the total an interview in the new mortgages, pays off your previous mortgage balance, takes out misc fees, and pays you th difference.

if cap rate is 5.5% why would it be negative cash flow with financing? What is the interest rate you are planning to borrow? Rates are so low nowadays. For a 200000ish loan you should be paying about 1000ish a month for a thirty year fixed. 

how long are you planning to stay in it? Usually the paperwork states intention to live in for one year for conventional loans. It might differ in different loan programs. If you stay the full time as required, you can borrow as long as you qualify.

I would be very alarmed if you are having problems paying mortgage without a tenant in place for at least 3 months. In long term operation, things happen and it might take a lot of time and $$ to fix and make the unit rent ready. All landlords should consider having reserves for their rentals. Usually the bank requires 6 months Principle Interest Tax and Insurance payments in cash reserves when issuing a loan for an investment property. Since you are planning to acquire this as a primary residence and house hack, this is a great way to get started but I would advice a new landlord to take the same conservative precautions when starting out. Have plenty of cash reserves for the times when things go south. An investor will need to create wealth and keep it. Good luck!

I think you can definitely choose to shop around a little for lower closing costs. Is this a direct lender (like a bank, like Wells Fargo) or a broker (usually work with multiple lenders)? Direct lenders in my experience has the lowest closing costs.