All Forum Posts by: Nathan DeJonge

Jason,

As with everything in real estate investing...run the numbers, and if it works out then go for it! Be sure to factor in thr $6,000 penalty with any options.

With a HELOC, you only have to pay for an appraisal and you do not have to pay interest on the credit line until you use it. The downside is that you can traditionally only get a line of credit with equity you have up to 80% or in other words $152,000 (assuming a value of $190,000 multiplied by .80). This in fact would leave you with a whopping two-grand to invest. Now I have found some local banks and credit unions that allow up to 90% which would put you at $171,000 minus what you owe. So in this case your HELOC would be valued at $21,000 however this generally comes with a higher interest rate. Like 2% higher.

Understand that with a cash out refinance you have to pay closing costs (or at least wrap them into your new loan). Also, just like a HELOC banks typically only lend up to 80% of the home value, which again leaves you with almost nothing.

My advice, find more ways to house hack. Continue to force the appreciation of your home through renovations. Rent out your room through AirBNB as you sleep in the common areas like a living room or basement. Perhaps try to partner with or shadow someone that is already successfully investing in real estate,

Also just plain get your living expenses as low as possible so that you can save up money for your next real estate investment! This is by far the best strategy in my opinion.

I wish you the best of luck.

- Nate

To be completely honest David, I would think about what areas you know. I understand that you currently live in LA and that the prices are too steep to enter the real estate game. Did you grow up in another area? Did you go to college anywhere? Any place that you have spent a considerable amount of time would be the first place you should look. This way you know the streets like the back of your hand while having an understanding of who loves where. This knowledge takes years to develop a reliable intuition with. I personally don't believe that this can be gained through off-site research alone. Go with what you know.

Doing this is much better than getting a tip on a city that is probably already old news, exploited, or at the very least unfamiliar. The only other option would be to invest with people that you trust that already know a particular market.

Best of luck!

The taxes in Ypsilanti Township are different from the City of Ypsilanti because they are altogether different entities. The taxes in the City of Ypsilanti are the highest in all of Washtenaw County with a millage rate in the mid 80's I believe.

That's awesome. 

So what? What are you thinking about them and what are you trying to do with them?

If you are willing to live in the home that you purchase, and you currently do not have any other FHA loans, then yes you can apply for FHA.

If one of your other properties is an FHA, then consider refinancing with a conventional loan. This will not only allow you to get a new FHA loan, but also potentially get rid of the PMI you are currently paying.

Listening to BP Podcast episode 289 should help.

If you give hime equity then the two of you would be subject to SEC regulations.

However, if he simply lends you the money, then the two of you can agree upon terms that you are both happy with. Because you would technically be adversaries on this deal then the SEC would not be involved. 

Also remember that if you are willing to live in this next multi-family ( and it id a 4-plex or less) than you only need as low as 3% down to get it. 

Check Craigslist, Zillow or similar websites to find rentals in your area. This is the easiest way to find the contact information for current rental owners that may be willing to sell. Write, email, or meet with them and discuss your intention to actually but their property. Then you can see what their financial wants are and possibly suggest seller financing. this wayIf they already have the property paid off  you can put your 10k to 15k down and discuss a percentage rate that still allows you to cash flow the property. 

You may feel like this would never work, but seller financing actually has a lot of benefits to the the seller.

1. They get the money from the interest, rather than it going to the bank.

2. They get  a 100% passive monthly check which relieves any headaches of the landlord life.

3. If you (the buyer) fail to pay, then they have their original property as collateral.

Not sure what type of home it is or if it is local to you. But if you don't mind moving in then you can do a 203k and house hack it as a live-in flip. That way you can move out and rent it after a year. Or you can sell it down the road (after 2+ years) and pay zero capital gain tax. 

If you can't swing moving in then I would look to get private money for the renovations. Listen to Bigger Pockets Podcast Episode 289 for some tips on that.

I would consider cash for keys. If it will be cost effective (or just worth your personal sanity) then give him some money to clean out his stuff and walk away from the property.

Tyler, 

Start out by being upfront with your desire to continue in the Real Estate game whenever possible. Always bring it up with coworkers and friends when acceptable. 

Also, are you certain that no family member or friends have an ability to invest? This seems like an assumption or a resilience to ask them (which is totally natural). If they have a IRA or any equity in there house than they can invest with you for sure. Also if you've had your 3-plex since 2015 then you yourself could probably get a HELOC in order to invest in the next step.

Hope this helps. Get back at me with any further questions.

- Nate DeJonge