All Forum Posts by: Nicholas Baughman

@Keith Johnson ya, that episode completely opened up additional opportunities. I need to call around and act like I'm interested in renting a place then ask if it's ok to sublet while I'm "away". 

Hello, I just listened to the latest podcast and Zeona started out in Airbnb which got my head turning. I have a decent amount of equity in my home and I've been racking my brain on what to do with it. I want to start In My own backyard but the entry is pretty expensive, to say the least. So what if I rented an apartment at the beach or near the colleges but sub-leased it out as an Airbnb? Does anyone in the area have any experience doing this? Are there places better than others to do this? Are there county laws that prohibit this? Any advice or input would greatly be appreciated. Thank you.

@Justin R. please explain. 

@Marshall Martinez Thanks for that reminder but I'm exempt from the fee. One thing I'm now considering is investing in notes after listening to Bob Malecki discuss it on the podcast. I'm thinking if I took a HELOC out I might be able to use that to purchase distressed notes and possibly even work with Bob or through his company. Something to consider.

So, talking with some local lenders tonight they suggest a VA cash out refi. I'm waiting on the numbers back from one of them. However, they pointed out that using all of the HELOC as your down towards an investment property would negatively effect my credit. Meaning, exhausting the entire line would show a huge amount of revolving debt. This would make it harder to acquire other loans. Plus, you have the rate uncertainty to deal with when factoring in the net income form said property. So now I'm leaning back to the VA refi cash out because I know what my rate will be at and can easily determine my operating costs along with PITI in order to see if the deal is profitable. Furthermore, the HELOC may make it harder to get the new loan on the investment property. So I'm having the lenders determine what is the likelihood of me being able to roll the refi in to the new investment property loan all at once. Does that make sense? Plus, this particular lender does a 90% LTV on a Cash out VA refi whereas most HELOCS are at 80. Although I hope I don't have to use that much, there is that option.

@Marcus Johnson I'm not getting 3.75% on a loan for the investment property. I'm getting, or close to, that on a cash out refi. My intention was to then use that cash towards the 25% down I needed to fund the investment property. The new note on the investment property could have rates of 4-6% depending on who I use to finance it. That's why I need to compensate for the increase of my primary interest, from 2.75 to 3.75ish, which will increase my mortgage about $600 (worse case). Then to roll the added expense from that increase in to the investment property to see how much cash flow I actually have (minus other expenses of course). Now, from my understanding, the HELOC won't effect my awesome rate I have on primary and I could calculate that towards the investment property a little easier.

Wow! This is why I love BP. I really appreciate the sound, organic advice that's not filled with trying to get people to buy something or join them in order to get answers. Thank you all. If anyone has anything more to add I'm always open to hearing it. 

@Cary F. I'm assuming interest only HELOCs are low interest? Like what? 2%? That's the first time I've heard of that. Can you give me an example? Also, pardon my naivety but what is OPM? In my current field of work we have ORM (operational risk management) and OPM is Office of Personnel Management. Haha. 

@Fabio Salas I know you don't want to give away all your secrets but what out of state turn key markets are you looking at? 

This is really great advice. I haven't really considered the HELOC but I think I'll look in to it more. There's definitely pros and cons to both. My question about a HELOC though is can you acquire as much out on one as you could a cash out refi? Are there any places that do more than 75% LTV? Also, when I decide to do either one, does anybody know if it will become more difficult to finance the investment property since I will have one of these two loan options out?