All Forum Posts by: Ryan G.

I think staying put is leveling up. You should also count the principal paydown on the mortgage, consider evaluating the networth portion and not just the cashflow.

Hey community,

I'm sorry if this is a broad/dumb question.

I have a couple of SFHs and have been slowly growing my empire. My plan was to do a low leverage/safe strategy, and pay off the handful of SFHs in a few years with my large W2 income, and decide at that point what I wanted my long term strategy to be.

However, I'm suddenly in a financial position where my W2 income has skyrocketed even more, and I've moved into  the 30%+ income tax bracket. My depreciation on the couple of homes is only around $10k a year offset for my income. I'm trying to decide how/if I should jump to a much larger real estate vehicle(ex a small apartment complex) where the depreciation would perhaps offset a much larger amount of my income.

Current challenge: I only have around $50k cash on hand. I suppose I could save like there's no tomorrow, and muster around $200k within the next year or two. 

Question: Is getting into an apartment complex feasible? Will the depreciation significantly help my W2 income? I've bought and sold around 5 SFHs but have only read about multi-family. 

@Andrew Postell Thank you for the details! That is very helpful going forward. I had thought about the lake house scenario before, but I hadn't considered 'proving' other comps don't have new windows. That is probably half of what bit me here. 

My 1 acre lot is a bit the 'lake house' in the area, as most lots are half acre. Having a half acre fenced in back yard and a half acre front yard is clearly noticed and appreciated by my tenant; though maybe this appraiser is a city slicker! You've given me a lot to reflect on for my next properties aspects!

Hi all, 

I'm doing a cash out refi, and the appraised value is "okay", but I think it's off by about 20k; which makes a huge difference in the cash out value. Essentially, there are 4 adjustments the appraiser is doing/not doing that seem very odd to me and it seems I have no power to get it corrected? My loan officer sent them for reconsideration, and the appraiser sent it back with no adjustments.

1) All the comps were half acre lots, while mine is a full acre - No adjustment, even though the land value in this area is 20-60k per acre.

2) One of the comps was a 2/1 with 2 dining rooms! (I actually looked it is a few years ago, it had a weird layout). This 2/1 sold for 80k less than the other comps(3/2s). The appraiser adjusted 5k for an extra bedroom and bathroom. This comp significantly dragged the appraisal down.

3) None of the comps had new windows, while I spent 10k upgrading my properties windows to new energy efficient ones.

4) Appraiser marked one of the comps as a 2dw when it was actually a 1dw, a several thousand dollar adjustment mistake.

It seems really odd to me that the appraiser can effectively ignore errors they've made, and refuse logical adjustments. 

This is my first CashOut refi.

@Christopher B. As I understand it, Extreme Ownership does not mean you take the blame when an expert on your team makes a mistake and misguides you. There is a difference between ownership and putting the locus of the universe upon one's shoulders. When your accountant makes a mistake and you miss it too, do you blame yourself for not having supreme knowledge of the tax code? I also realized that there were a few other errors that I did catch during the process. Lesson learned, I need to find a better mortgage officer for my team.

@Chris Davidson The loan officer basically said that I didn’t specifically tell them to lock in the rate. To which I responded that they’re the professional/expert and trusted advisor, and I should not have to direct their every move; and that if they thought I was unclear they should have asked me to confirm yay or nay. I then gave them another opportunity to see if they could correct the miscommunication/mistake to continue earning my business, and am waiting for a response.

I may just seek out a more investor minded bank/mortgage officer; this has really hurt my confidence in them.

I may just have to chalk this up to a lesson learned, or decide to get a new banker on my team. Tell me what you think.

So, I went to finance a house and my banker(who I've done 2 other mortgages with) asked me if I wanted to lock in the rate. I responded in a way that apparently confused the banker by saying,  "Yes, please proceed. By the way, what are the 15 year rates today versus the 30 year rates?", which subsequently led my banker to not lock in the rate. I signed the 40 pages of documents, and missed that small, singular checkbox on page 20 which said the rate wasn't locked in.

Fast-forward 1 month to today, 3 days prior to closing, and to my surprise the interest rate on the loan closing is 1% higher than what was originally discussed, costing me tens of thousands of dollars over the life of the loan! I know it's legally, perhaps my mistake for missing the checkmark on the excessive documentation sent to me, but I feel it's my banker's fault. I'm thinking of finding a new banker, what do you think?

I mean this seriously, the best path is the one you pave yourself. Most people make the mistake of letting life happen to them, and coasting on the crowd advice. If you're looking to challenge the norm you're already headed in the right direction.

Hi Investors,

I'm investing in Single Family homes. My question is, how do you know whether or not you're over-extending financially. I know this may be subjective and based on one's comfort level, and am curious what you other investors feel.

I'm looking at buying 2 more rental properties(would become 3 rentals + 1 for my own home, for a total of 4 mortgages) and after running the numbers, if all 3 properties go vacant and I have to float the mortgages myself; it will be tight.

But at the same time, I understand that commercial investors have no WAY of floating the mortgage should something go awry.

What is your thought process for your own comfort level or risk?

These have all been wonderful comments. Thank you everyone. This has been/is going to be a good learning experience. My tenant is talking about counter-claiming all the money he owes for 'work done around the house'. I don't see that going very far with the judge based on the evidence, but he's talking all big.; probably a defense mechanism, trying to cover his own guilt for what he's actually doing by making me his target of blame.

My wife and I were talking last night how crazy it is.The renter is acting like we've altered the deal, as if paying rent while you're staying in our house is a major shift to the 1 year lease he signed.

Going forward; definitely going to change our approach for our next tenants. Be more hands off and by the rules, minimum of a PO Box and eviction notices when rent isn't received on time, might go full-bore with a property manager, we'll have to see what's available in our area.