All Forum Posts by: Paul Shannon

1.  Provide value without the expectation of anything in return.  It will come around 10x. 

2. Challenge traditional norms and don't be afraid to go against the crowd

3.  Always be learning/reading.  Knowledge is power and it will guide you towards the path that's right for you. 

If you haven't seen this, check it out:

https://www.biggerpockets.com/...

Timing the market is hoping to get lucky.  Usually when all the headlines direct the masses to a forgone conclusion (market crash is sure to come in 2021), the exact opposite happens.  Maybe it will happen, but waiting to get started until your crystal ball shows you the future will lead to inaction.  

Not saying throw caution to the wind.  As others have said, have multiple exits, have extra reserves, etc.  But if you plan to hold for the long-term, this crisis won't have much of an effect on your long-term results.  

If you are buying to flip, make sure the numbers work as a rental too. 

If it were a fixed rate loan and you did really well on the project, consider giving them an extra 1%.  By overdelivering on your promise, you'll have money to recycle for years to come. 

Not the same, but similar process.  In both cases your home will be appraised and a value will be determined.  

People refinance either because mortgage rates have dropped considerable, or the value of their house has gone up significantly and they want to pull out some of the equity.   

Example: Buy a house for $100,000 at 5.5% interest rate, and 80% LTV (20% downpayment). 5 years later, the house is worth $150,000 and rates have dropped to 4%. At 80% LTV, you could take out $120,000 loan and pay lower interest on it. The bank would actually write you a check at the closing.

A HELOC is not the same. A HELOC will take the appraisal and determine how much equity you have in the house. They will loan you 70-90% of that equity to use whenever you want to. Like a credit card. You only pay interest while the money is in use. The interest rate will be a little higher than current mortgage rates, and is a floating or adjustable rate, meaning it will change anytime the Federal Reserve moves the fed funds rate.

Once there is a bandwagon, I feel i've already missed my opportunity

BP released this data back in March:

https://www.biggerpockets.com/...

This research looks at best cash flow and best appreciation markets over the last 10 years.  They also then combine that data to come up with a "hybrid" market.  

Evansville,IN is close to the top as a hybrid.  You get steady cash flow with the opportunity for appreciation.  That's a good combo.  

I've got one of these.  I paid cash for it in a package.  I took a line of credit out on the package after, but the bank didn't want the aforementioned property as part of the collateral.  I couldn't figure out why, as it was a nice house otherwise and the foundation is solid.  Its basically a crawl space with more head room, right? 

https://www.biggerpockets.com/...

Good article by @Jordan Thibodeau on the topic. 

From a local credit union I have commitment for a step-down rate as renovations are completed. 4.25% at 80% LTV, 10 year 25AM. Once value-add is complete the rate will drop to 4%. Almost like a bridge loan (a cheap one!), but its all baked in to a 10 year fixed contract.