All Forum Posts by: Rusty Thompson

2 keys per unit. 

The long term loan from my 401k is 10years. But it can only be used for a primary residence. I still stand by my conviction that a 401k loan, used wisely, can be one of the best ways to kickstart real estate investing.

what is a ADU/MIL?

assuming that your adding thr basement unit  legally.  Why do you need to Refi. Keep the low interest residential loan in place. 

im not usually this black and white when it comes to making a decision like this.... But. No. That isn't anywhere close to a good deal. If nothing makes sense in your area. Find a place where it does. Or invest your money in a asset the performs better.

@Nathaniel Donnelly I think that advice is a over generalization. Make your choice based on the numbers. In some places multis make sense. In others SFR's make sense. Buy whichever makes the most sense to you. I can say that vacancy rate tends to be a lot higher in multi's compared to SFR's. Take that into account when your running your numbers. Best of luck expanding your portfolio

@Josh Johnson 

A standard FHA mortgage will allow you to acquire up to 4 units with 3.5% down. The problem is that your PMI lasts the life of the loan.

There is a 5% product that also has PMI, but after 5 years if there is a minimum of 20% equity you can apply to drop the PMI. which saves you the cost of a refi & the chances of higher interest rates.

After that a good vehicle to increase your portfolio is the HomePath 10% investor mortgages. Have to pick from their available properties, but cheaper than 25%.

What is the return in your 401k and what return would you be getting in REI. I personally borrowed money out of my 401k to invest and don't regret it. They are just two different asset classes, put the money in the one that is performing the best. On another note, its only a 5 year loan, so its payback is pretty short.

@Jay Hinrichs 

Yep, down in good old Salem. Thanks for the information this has been a pretty insightful discussion.

@Jay Hinrichs 

I agree it can be hard work. I have 5 houses in nice A-B+ areas and they are super easy to manage & rent. My 8 unit apartment complex on the other hand is a bear. I'm probably over there once a week taking care of problems. But I also make quite a bit more with my apartments.

The problem I see in your system is that it penalizes the properties that are easy to manage. A scale-able  system (kind of like car insurance) would ensure that the burdensome properties are now worth the time of management. I think the best system would be for management companies to separate their business based on asset class so that each type of property can be grouped per the amount of work necessary. A (A+) department might be able to manage 1000+ properties with a great level of service. A D- department might be only be able to manage 100 with the same level of service.

The only problem I see with it is that it would require a large management company to make it happen.