All Forum Posts by: Austin Tam
Austin Tam has started 7 posts and replied 66 times.
Post: When to sell vs. when to cash out refi
- San Francisco, CA
- Posts 77
- Votes 41
Originally posted by @Ned J.:
@Austin Tam..... I'm in the exact same boat as you...central valley....got 2 properties that have a ton of equity and moderate cash flow..... and can't find squat in CA anymore that makes sense with the numbers.
So sell, them, and 1031 them into......what?...where?,,,,,,,CA is tough to find something else
Take equity out and buy......what?...where? again, CA is a tough market...
My one newbie advice is to be careful with how much equity you take out of them....if you go that route....don't max it out and risk being way upside down when/if the market corrects or tanks again..... only take out enough to free up some $$ to buy something else...don't overleverage them.....
Interested to see what the more experienced people say....
Hey Ned, thanks for the response.
If I max out the refi at 75% LTV on a 30-year fixed, my current below-market rental income will still cover the mortgage payment. We have plenty of room to raise rent, but just haven't done so because the tenants have been pretty much set-it-and-forget-it and we'd like to keep them there.
If I decide to go the refi route, I'm not worried about the market correcting/tanking. As long as the rental market doesn't crash, we can ride through a downturn. I'm risk averse so I've definitely explored the risks. My wife and I both work full time with good incomes, minimal expenses and zero debt (at the moment) so if the sky does fall and I'm not able to rent a 3bd2ba in Elk Grove for at least 1k, we can cover the loan with our paychecks.
But while we are on the subject of over-leveraging, would it be over-leveraging if I were to leverage on top of the refi to extend our buying power further? So Instead of paying all cash for a 225k property, use the 225k as a dp and mortgage 675k on a 900k property/properties...
Post: When to sell vs. when to cash out refi
- San Francisco, CA
- Posts 77
- Votes 41
I own a property in Elk Grove (a suburb in Sacramento) that I'm looking at options to free up capital. We purchased the property in 2011 for 140k all cash. We've had the same tenants in place since we purchased the property, and they are model tenants in every sense.
Our current CoC return/cap rate on the property based on the original investment is roughly 7.5%, which isn't terrible. However, the property is worth a little over 300k today. If I take my current cash flow and use the 300k buying power number, my return is only 3.6%. Let me know if this isn't the correct way to look at it.
The Sacramento market has done us well in terms of building equity, but I'd like to start putting that equity to work. I can either do a cash out refi or sell the property. What are the factors I should be considering to figure out which option is better for me?
Post: $1,370/mo SFR Cashflow in Illinois!
- San Francisco, CA
- Posts 77
- Votes 41
don't see this on the site - can you send me more info? [email protected]
Post: 10 turn-key properties with gross rents of $5k/month $250k
- San Francisco, CA
- Posts 77
- Votes 41
can you send me more info on the properties please? [email protected]
Post: Wholesaling contract 25%-33% ARV
- San Francisco, CA
- Posts 77
- Votes 41
can you send more info to [email protected]?
Post: Forest Park (Atlanta) Triplex + Single Family Cottage SOLD!
- San Francisco, CA
- Posts 77
- Votes 41
can you send p&l and photos to [email protected]