All Forum Posts by: Robert Rodriguez

ooooh interesting I didn't know about the limitation on the HELOC on rental vs primary residence. I currently see Navy Fed has 20 year draw period and 95% LTV. I guess that's on primary. I will call to find out more details. thanks

Quote from @Joaquin Camarasa:

HELOC's typically will be for 70 - 90% of the total house value with a variable interest rate.

As for the strategy to use, much better to pull a HELOC than hard money loans. HELOC's will allow you to pay interest only of the total loan amount for a certain period of time, in case things don't go as planned, it is a good option.

If you are paying property and renovation cash, your total payment will be high I am not sure you will be able to cover it by renting to tenants in Northern Virginia. (I see you are in Woodbridge, so I assumed property is there) You would really need to get a property with a steep discount, not common.

If paying cash for property and renovations, probably your best bet is too sell it after the renovation. 

Keep it mind we are not going to see the same appreciation we have seen in the last years, if they keep raising rates, there might be a little softening in prices. However, if they lower rates in a few months it might be a good option to buy now and sell in the spring.

Impossible to know what is going to happen. Chat with wife and decide the risk tolerance you both have. 

Thanks for the advice and a lot of what you have said makes sense. I think i am going to go with the HELOC . As you said the interest rates are better and i can make the interest only payments.

With the economy going as it is, i would like to have my back up plan. So, if i can't sell the FixnFlip. Then maybe i rent the place. If i perform a cash out refinance can I only cash out enough to cover my HELOC? Or do i have to cash out everything? The reason i ask is because the price to buy the property plus rehab is going to be lower than the ARV value. So, i would want the renters to pay the mortgage but if i take out the extra than the mortgage might be too high for rent to cover.

Few years ago my wife and I made the decision to pay off our rental property. Not my thoughts but hers, she just felt more comfortable/less pressure knowing we didn't have 3 mortgages due (our own and two rentals). Of course i thought, use the money to get more properties but i listened.

Well here i am $17k away from paying off one of the rentals and a contractor friend comes to me and says, he has money but is tired of just doing contracting for investors. I want to have my money do stuff for me too. I know he knows all the ends and out of construction just not the real estate side. So, he wants to partner with me and flip some houses on the side.

i think it's a great opportunity and as i look for financing start to think. Should I finish paying off my rental (last $17k maybe take two months). Or should I open a HELOC on the property and use that money to buy a house cash. Pay back the HELOC as we fix. Then when we sell it pay the HELOC off. Then repeat.

Or if we need a buy and hold exit strategy. Use the HELOC to buy the house cash, rehab it. Put renters in that can pay my HELOC. Then when favorable interest rates come around again, Refinance and pay off the HELOC ... Then look for another property.

the other alternative would be finish paying off the rental. Realize i reached my goal. Then take out a hard money loan to purchase the next property. If normal financing won't lend based on condition of the house.

If i owe $17k and my house is worth $400. Will HELOC let me get it for that much? Or is it a percentage of the home value? Do they allow HELOC to be in the hundreds of thousands anymore? If i pay off the rental will i be able to get a HELOC then? Or is it easier if I'm still carrying a mortgage?

I see a lot of people saying put the money in an ETF instead of paying down the low interest rates. I'm going to reveal my noobness but if you do that .... Is there an easy way to pull that money out once it's big enough for a down payment on an investment property? Would you have to calculate fees for cashing out of the stock and getting the rental? Would their be taxes to pay on that money? Or is everyone saying invest it in an ETF and just leave it there without saving up for another rental?

@Patti Robertson Wow there is so much red tape that I didn't even know about. Sounds like a big headache waiting for the naive... Thank you very much for this information.

@Patti Robertson Thank you for your input. I believe I have crossed your path before in the past. From what I recall I think we talked about you participating in sec 8 program (I know it has a knew name, just easier to type). So, do you have any of those in Portsmouth? Is the market for this saturated in this area or as long as you have a good place you should be fine? Also do you happen to know of any PM that service Portsmouth?

@Charles Williams thanks for confirming this information. I will be sure to have the inspection done before I try to move anyone in (once the time comes). My mom has had it with this place but she will stick it out a little while longer. I'm going to get her to sell it to me. not sure if you know but how is the Housing Choice Voucher Program in Portsmouth candidate wise? This is the route I think I will take when I own the place. Thanks again for your help.

@Joshua S. This is all the info that has been told to me, I don't know how much is true as it's just word of mouth.  I'm not sure of the exact penalty but I know they will sue you and take you to court if you don't pay the fine. Not sure how much you have to pay though. They will also give you up to a year to have them come inspect it. if it passes your good but if it fails and you had people living in there ... it doesn't turn out well. 

Trying to find out if anyone knows of an inspection that needs to take place by the Housing Authority, in the city of Portsmouth Virginia even if you do not plan to rent to Section 8?  I was informed by someone looking to invest in the area that, if you own an investment property in Portsmouth it must be inspected by housing authority before you can move any tenants into the property. 

all thanks again. I talked to the person who was going to do the carpet and they said they have enough vinyl on hand to complete my place. I'm going with the vinyl and they start today. if they don't finish by Sat... I will just inform the tenants to keep their stuff on the first and second level while they finish the bedrooms upstairs. if there is a delay hopefully it will just be 1 day of not having access to the bedroom. thanks again for the advice I'm sure you all just put money in my pocket by keeping me from putting carpet back down.

Thank you @Blair Poelman, @Ned J., @Marc Winter for the responses.  I guess I never thought about putting something else on the floor besides carpet.  Now I face another dilemma.  My tenants move out July 5th and the company I used to find me tenants have them moving in July 7th.  That's not enough time to have a new floor installed.

I'm not sure which is faster carpet or any of the other alternatives that were suggested but i'm not sure 2 days is enough time to purchase, deliver, and have installed.

The tenants that move in are only going to be there for a year. Maybe I can get by with putting cheap carpet for the year and then when they move out give myself enough time to do hardwood or vinyl.  Currently right now the entire second floor of my townhouse is wood floor.  The only places i have carpet are both sets of stairs, 3 bedrooms, and a short walkway between the two bedrooms. The carpet that needs to badly be replaced would be the carpet in the 3 bedrooms and the short walkway between two of the bedrooms the stairs are fine for another year.

So does that change any of the responses? or a professional installer should easily be able to knock out 3 bedrooms with vinyl so the response is the same, and I should still go with vinyl?