All Forum Posts by: Paul S.

@Dawn Roof 

 it has been a while since I have been to Charlotte but I think it is a good place to invest. If the numbers work for you then I think you have a pretty good deal. Crime rates can fluctuate and there are ways to get increased police patrols in the area which may or may not affect the crime rate. Your concerns for schools is valid but you are in NC, so what do you expect? (I live in NC for about 20 yrs, and moved before my kids were school age) I would suggest that you do a little research on BP about buying tenant occupied properties though. Some things to consider is that you are inheriting those tenants. There are numerous posts about ways to deal with that and ensure a smooth transition. Good luck and keep us posted. 

Unfortunately @Jarred Black the first part of the tax code 26 U.S.C. § 1 imposes the income tax 26 U.S.C. § 61 and § 63 go into further detail. 63 talks about your gross income minus the allowable deductions. 61 defines what income is. Specifically gross income means all income from whatever source derived, including (but not limited to) the following items: (look at 2,3,and 5)

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;
(2) Gross income derived from business;
(3) Gains derived from dealings in property;
(4) Interest;
(5) Rents;
(6) Royalties;
(7) Dividends;
(8) Alimony and separate maintenance payments;
(9) Annuities;
(10) Income from life insurance and endowment contracts;
(11) Pensions;
(12) Income from discharge of indebtedness;
(13) Distributive share of partnership gross income;
(14) Income in respect of a decedent; and
(15) Income from an interest in an estate or trust

I am not a lawyer (would not admit it if i were) but I did sleep at a Holiday Inn last night. Really I wrote a paper about this for a class on Government a while ago. 

Looks like all the free ones are gone.

@Damon Jordan 

 you might want to check out another BP forum from 2010 Here not to mention if you do a simple google search for dohardmoney.com ripoff you will see a plethora of sites that warn against using them. You can also check out the Better Business Bureau (BBB.org) they give the company an "A" rating but they do have some complaints against them. I think the biggest complaints are that they charge high fees and they require upfront fees. I recommend you search the google machine as well as the BP sight to educate yourself a bit more.

Good luck!   

@Account Closed 

Sounds like her prerogative is much different than her husbands, I am betting the husband will not be doing much investing anytime soon. I think you did the right thing by keeping your cool. I would also take it with a grain of salt just like @Elizabeth Colegrove said, you are not going to make everyone happy.

@Naphat S. anytime you get a loan for a non-primary residence you will end up paying a higher interest rate. In my (limited) experience it has not only been more difficult to get approved for an investment property. I have found that the Loan To Value (LTV) is often about 10% lower and the interest rate is usually a few percentage points higher.

Great Idea @Sam Leon thanks for the photo so we can see exactly what you are talking about. 

@Jerry W.  brings up a great point that I forgot about. The potential appreciation could also provide you added value if you sell it later. 

One more reason you may want to keep the property is that you should be making a substantial amount each month since there is no debt service to consider or take away from your cash flow.

@Naphat S. personally I like option 3 or 4 the best. If you try option 3 will a cash out be enough to purchase 2-3 outright? Will the rental income from all those properties be enough to cover the cost of the HELOC? Remember to figure in maintenance, as well as debt servicing and other associated costs. Also your interest rate will be slightly higher since this is not your primary residence. But if this works for you and you may have the possibility of taking out more HELOCs (or LOCs) then you can just rinse and repeat to build your portfolio.

Option 4 may work if you can get financing for the additional homes, some lenders may shy away from you if they see that you are using a LOC to fund your down-payment.

Good luck and be sure to keep us informed about your choice and how it all works out for you.

ps if anyone one out there thinks I am an idiot please let me know as I am looking at sucking equity out of a free and clear home to purchase another investment property.

@Ryan Brown and @Kenneth Hynes you may also want to try craigslist. I would just be sure to ask for references as and check multiple contractors (don't always go with the cheapest). If the contractor is decent they should have references and some photos of past work completed. I also used porch.com to look up potential contractors. I have never used anyone through that site but I know there are some listed on there with photos of jobs, and you do not have to pay for it like Angies.