All Forum Posts by: Robert Walmsley

@Jon Crosby

Thanks. Tough to find fixed rate heloc on an investment property, any suggestions?

Here is my scenario, Sacramento California.

Rental property that I owe $145K (appraised at $430K) at 3.6% 30 year, 7 years into the loan, total PITI payment $1080, currently rented to great tenants at $2200 per month.

Have a few days to decide the term of my refi, here are the choices:

15 year rate/term at 2.25% increases PITI payment to $1290, still cash flows great and I pay it off quickly.

30 year cash out ($100k, staying under 60% LTV for rate) at 2.25% brings PITI up to $1380, still cash flows well and frees up $100K for another property. But I restart the amortization and won't pay the house off for a long time.

Not a great time to invest in another deal here in CA but will I kick myself later for not pulling the funds for the right opportunity? $100K at 2.25% is cheap money, plan on just holding it until the right deal comes up. Part of my wants to pay off the rental quickly to increase cash flow to $2200 per month minus tax and expenses.

Need some advice. I’m an experienced broker/general contractor so I know the ropes on finding another future deal and controlling costs but when will that deal come is the question. Thanks for your help!

Thanks Dave, appreciate the perspective. 

I have a SFH built in 1998, 4 bed, 2 bath, 3 car garage, single story in excellent condition in Antelope, CA. I owe $140K (Originally paid $175K in 2011) the ballpark market value right now is $420K ($280K spread). My PITI payment is $1,104 and I have it rented for $1595 however my tenants are getting ready to vacate. I can re-rent for $2000/Mo. and capture roughly $900/Mo. or sell.

My loan is 30 year fixed at 3.6%, I am a RE Broker so I can minimize costs on the sell, probably net around $265K. It has been a rental for a few years so I will have to pay cap gains or roughly $50K netting out at around $215K.

What should I do?

Capture roughly $900 per month on the rent or walk with the $215K? 1031 exchange is an option but I don't think I want to re-invest in todays market in my area. I am not excited about land-lording across the nation either. What would you do? Looking for some guidance. Thanks! 

Thanks Dave & Derek, I know what you mean with the numbers, it is impossible to find a deal near this now. I am just a bit anxious because there are some beautiful homes in Fair Oaks and Roseville right now in the 500s and 600s and liquidating to put +$250K down and lock up a new primary in the 3 or 4%s is tempting. 

BUT... I guess one of the critical traits of an investor is the ability to hold and not get excited over the ups and downs. 

I bought a SFH in 2011 in the Sacramento (Antelope) area rehabbed it and have it rented. I owe $162K and can sell for $350K and still exempt myself from the gains. The PITI is $1,004 with a 30 year @ 3.62%, it is currently rented for $1,495 (A bit under market but have excellent tenants). It was built in 1998 and has been rehabbed so I do not anticipate any major repairs, I have a home warranty in case the HVAC goes.

I am a real estate broker and plan on expanding my rental portfolio over the next 10 years and in my opinion this is an excellent rental to have in the portfolio. However, I am considering selling along with my now wife's house to put +$250K down on a primary residence. Now is the time to sell so we can both exempt our gains and get setup in a "dreamish"  house with a low mortgage payment and rate. But it has been such a good rental so far and it is my escape plan if things ever go bad because we can afford a $1000 mortgage no problem. 

So should I sell to have a large down for a new primary? Or just sell the wife's house (Net $60,000) and put the $60K along with saved money for a modest new primary? Thanks for advice in advance!

Thanks for the feedback, I will do some more research and rephrase the question at a later time.

I know that scenario is not accurate in terms of a true estimate of cash flow, I just wanted to keep it simple to exemplify the staunch difference between all cash and leveraged cash, I apologize.

I guess my real question is how to approach private lenders/investors I know and sell them on the idea of lending money, secured by a property of course, at a lower rate than I would get from a hard money lender and at more favorable terms regarding the loan length.

I am a Realtor® and have a property with about $75K in equity. I want to purchase a second investment property but do not want to tap my equity. I have a few friends/colleagues whom I can approach for private funding. Here is my question/example using easy numbers (not a real scenario):

Buy $100,000 property cash that rents for $1000 per month grossing $12,000 per year which is a 12% ROI.

or

If I put 20% ($20K) down and finance the rest the return jumps to 60% ROI (just based on actual cash in.)

So I understand why it is beneficial to me to leverage myself with financing but why is someone going to lend me $100,000 of their cash at maybe a 5% or 6% when they understand this same scenario?