All Forum Posts by: Patrick McCracken

Thanks for checking, appreciate that. I talked to them on the phone and they said I would only have to pay for an appraisal if they had to send someone...might be able to do it virtually. And yes, I figure the $99/yr is well worth it to keep it open, but I'll realistically be paying more than that per year in interest so should be pretty negligible.

I just did some more digging and it seems like generally PenFed HELOC's are going pretty smoothly. Not sure what I saw before that made me think otherwise. I am actually liking this idea more. I saw something though that in NY you are responsible for paying any City/County/State taxes. I saw that sometimes there is a pretty big recording tax, but it says in their fine print that they cover recording, but I'm not sure if that's the tax or not. What kind of closing costs did you see when doing a HELOC through PenFed? 80% of my equity is probably around $110,000.

Also, I have been considering getting the exterior of the home painted as there is tons of chipped paint, etc. The units are beautiful on the inside but I'm worried that a "drive by" appraisal would not work in my favor. Do you think it makes sense to shell out $5,000 to have it painted before I start this process with PenFed? Obviously it also helps make it a more desirable home for potential renters too when it's nicely painted.

Thanks Mike - I've heard mixed reviews about PenFed - how was your experience opening a HELOC on investment property with them?

Yes, the fixed, low rate for 30 years (as opposed to the variable HELOC rate) is part of what makes the refinance an attractive option (in addition to the cash out).

My understanding is that the $25,000 HELOC would get closed and the old loan paid off, so that this new mortgage is 70% LTV and the only mortgage on the property. I am confident in my ability to analyze a deal and hold out for good deals...just trying to accelerate my timeline by utilizing the built up equity that I already have.

Tim, my quote from Five Star Bank. My understanding is that the LLPA (essentially "points"?) is higher so they can do a lower rate (3.125% compared to my other quotes of 4.25% & 4.5%). The other quote was like $9,100 so it probably makes sense to pay an extra $2,000 upfront to have a 1% less rate. Do you have any local recommendations?

Also, the original mortgage is through M&T and I actually do have a HELOC, but only for $25,000. I opened it right before we moved out (had to still be occupying in order to set it up) and I should have done a higher amount. I already asked if they would approve increasing the amount but because it's now purely an investment property, they cannot increase the limit. Maybe keeping the current mortgage and utilizing the $25,000 HELOC is a reasonable path...just a little slower than the "cash out refi and buy 2 more properties" path...

My thoughts exactly! I know that what I could cash out and use for 2 more properties to cash flow an extra $900 or so per month makes sense on paper, but it just sounds like way too much! :-)

Just barely, wouldn't be surprised with a blizzard tomorrow! haha

Yeah, I hear you. It would still cash flow really well ($325/unit or so), with a 12% cash on cash return or so...so I'm inclined to do it :-)

Hi all,

Trying to slowly build our buy and hold portfolio in Buffalo NY to eventually allow rental cash flow to replace my W2 salary. Right now I own 2 duplexes. One was a personal residence that we bought about 10 years ago for about $89,000 and have since moved out of and rent out both units. It's now worth around $200,000 and I am trying to figure out if I should cash out refinance and end up with about $63,000 (leaving 70% LTV) cash to use for another rental down payment, or if I should just ride out the remaining 20 years of this mortgage with a small balance (only $62,750 left). It's going to cost around $11,000 in closing costs to do the refinance, and I would be going from 4.125% to 3.125% with another 30 year fixed loan for $140,000.

Is there a downside to doing the cash out refinance that I'm not thinking about? Wish I could tap into all of that equity another (read: cheaper!) way, but it seems impossible to get a HELOC on an investment property. Any thoughts/suggestions would be greatly appreciated!!

Thanks,

Patrick

Thanks Greg. My understanding is that the 4 rentable units needs to also include one of those being owner occupied, which we are not.

Hi all,

I'm in New York (Buffalo area)...I have a "no pets" policy in my duplex, but have a tenant who has been there for 4 months now asking if it's a possibility to get a pet and pay a pet deposit because it's been recommended that her 6 year old son get an Emotional Support Animal for extreme anxiety. 

I want to be sensitive to this but at the same time we have a "no pets" policy for a reason. I asked her what kind of animal she was thinking and she said her daughter is really allergic to cats so it would have to be a dog (but not a puppy). She even said she's not 100% on a dog right now but wanted to broach the subject to see what our thoughts were. Honestly, I was hoping she would want a cat because a dog has the ability to scratch up our very nice hardwoods and also bark all day, which will annoy the upstairs tenants (who also work from home). Upstairs tenants are GREAT, pay rent early every month. The last thing I want to do is drive them away.

She is asking respectfully, which I appreciate, but I just want to know what my rights are in this specific instance. Really wondering if I have any right to determine what type of ESA animal they get (like if I can outlaw a dog because it would cause problems for the upstairs tenants).

Any feedback would be greatly appreciated! 😊