All Forum Posts by: Ben Howard

@Lana Lee

@Sean Cole

Good call. Definitely my mistake. It seems silly in retrospect, but I wasn't even thinking about the HELOC being used as an investment despite describing the HELOC in context of being used as an investment. Thank you both for correcting this.

This is just information, not a vote or suggestion one way or another. With the new tax laws, interest on HELOCs will no longer be tax deductible. Whichever route you choose, remember to take taxes into account to determine the full cost.

@Mike Hurney - For the most part, I didn't need to do anything.  It had ceiling fans everywhere, central heat/air, garbage disposals, and modern appliances including dishwasher and in-unit washer/dryer when I bought the place - but none of it is top of the line.  I'm competing with a lot of new construction all within a block that's all high-end luxury.  As a result, I position my property as just under luxury.  I'm a major step up from radiators, old electrical outlets, street parking, and having to walk to the laundromat, but a step below in home fitness center, underground parking, and granite counters.

Based on Trulia.com and Zillow.com (i.e., speculation), the purchase price of this house ($129k) was approx. $4k above the market rate in the immediate area.  I found this to be acceptable given that the comparable properties in the immediate area do not come fully rehabbed.  I possibly could have done more negotiating, but am satisfied with the outcome of the final price.  

I'm buying the property ready to go, rehab is already completed.

Assuming this goes well, then yeah, my plan long term is to get a handful of properties in a few markets.  I'm planning on getting #2 by the end of the year, so if this one goes well, I'll probably be right back with MemphisInvest in a few months.  If not, I'll revisit some of the other folks on BP who deal with turnkey properties.

Welcome,

I close on my first property with MemphisInvest sometime this upcoming week.  I can only review them up to this point - from the perspective of a prospective buyer who has decided on a property, has financing all set, and is ready to sign the paperwork.  

They returned my initial call nearly instantly, asked me what I was looking for, and tailored suggestions to my requests.  I received at least three properties to review per day, and a weekly check-in to see what I thought.  Once I decided on a property, I was advised that MemphisInvest only accepts financing from a short list of mortgage brokers.  I am not thrilled with this, but the rates I was quoted from their short-list were on par with what I could have done elsewhere, so it wasn't a deal breaker.  Once I got financing squared away, I started receiving a weekly call from a new person at MemphisInvest who updated me on the status of the rehab and any details regarding what was needed to complete the deal - I believe this person will be my personal account manager.

I can update after I close re: whether rents turn out to be as advertised, and if expenses turn out to be as advertised.  I can also update about communication.  Part of their sales pitch was that I'd get a monthly check-in and online access to all documentation regarding management of the property.  So, consider this a review in progress.

@Raj Tirur I just completed a HELOC with Hanscom Federal CU on my Somerville multi-family. They initially ordered a drive-by appraisal which got virtually everything wrong - sq footage, number of rooms, number of bathrooms, number of bedrooms, etc... While unfortunate that I had to pay, I paid ($600) for them to do a proper appraisal which blew away my expectations. I actually disagree with the comps the appraiser used, but it came out in my favor to the tune of an extra $100k in value.

The branch manager worked with me personally throughout the process and I'd highly recommend them. 

You speak the truth.  I moved up here in 2007 from Austin where I sold my much nicer house for almost $100k to buy a two-family in Somerville near Davis Sq. for just over $500k.

I don't know if you'll live for free even with a multi - though maybe a 3 or 4 family.  I rent out the larger unit in my house and one bedroom in the unit I live in and still end up paying a couple hundred a month to cover the rest.  This isn't even accounting for expense or vacancy planning.

I'm in the same boat. I already own a multi-family in Somerville that I happened to buy when the market tanked about 5 years ago. I'm looking to purchase a second property in the Boston area, but there's almost no way it will hit the 50% or 2% rule. I'm starting to consider other areas and continuing to look in/around Boston. Just like other investments, I'm not going to rush in just because I can.

I hadn't until yesterday. It had been my understanding that this wasn't allowed with a conventional mortgage. I finished the beginner's ebook yesterday and found an article on doing just that. I'm investigating this further as it would be ideal to get a second property near me and I'd rather not wait another decade to save up enough from my day job for a down payment.

My average 3 bed/1 bath is currently about average for the Davis Sq area as of about 3 years ago when the current tenant moved in. Unfortunately for me, they bought a house and are not renewing. But, rents have gone up around 20-25% in this area in the last three years, so it ultimately means I'll adjust up to the current rates and (hopefully) end up back near average.

I'd definitely consider Boston. I'm interested in Boston/Cambridge/Somerville for a second property. My biggest concern is that by the time I have 20% down for an $800k multi-family, it will be a $1.2M multi-family. I've actually considered the possibility of selling my existing multi-family, as well, to take advantage of the equity to use as a down payment on a triple decker. I'd still only have one property, but I feel trading from a 2-unit to a 3-unit (or 4-unit) is a deal not to be passed up.

This is part of why I'm here. All I really know is the conventional loan method. I need to learn what else is available to me or I'll be sitting on the sidelines most of my life waiting for my savings to never reach some ever increasing number.