All Forum Posts by: Ryan Horan

We would pay it off in 3-6 months depending on costs of certain repairs...you are correct in that it would eat into our reserves if we paid the $3300 off the top and we do have personal savings we could pay out of, but trying to keep real estate cash and personal cash separate. We want to keep enough in reserves for unexpected repairs. In short, any money out of the heloc would be paid aggressively so the effect of interest would be minimized, we started saving this year in a separate account for real estat only but already had the heloc in place from a previous project on our house so we're using it as leverage to buy a deal sooner rather than wait another 6 months to save more. We're depositing $1000/ month into our real estate account if that helps, but hoping cash flow from rentals takes over most of the depositing into that account at some point in the future. Thanks, that is a helpful pov.

Our first property is under contract and i assumed i would put down 20%, but I was offered another option, the numbers break down as such:

20% down apr 4.875%, pay $370 in points, p+i $312

25% down apr 4.375% no points, p+i $280

purchase price 73500, it's important to note the extra down paymentwould be paid by our heloc and I would likely pay that off aggressively, but the rate on that is 4.75% currently. The difference in initial payment is about $3300.

I know there probably isn't a perfect answer, just want to get feedback. I think the 20% down payment will get me to deal #2 quicker, but i like the thought of not paying points and more cash flow. Any help appreciated.

Thanks,

Ryan

We have our first rental property in Indianapolis under contract and I've received a couple quotes for homeowner's insurance, 1 was nearly double the other. I was hoping there was a standard amount of coverage/deductible (which it seems to be whatever the agent thinks is best), but actual cash value vs. replacement cost adds a totally new variable that makes it even more confusing. I guess I'm just curious if there is a percentage of home value that is pretty standard to have as amount of coverage. The deductible is set at 1% of coverage, which seems reasonable to me. Purchase price is 73500 and the dwelling coverage quoted was 129600 (although ARV most likely 90-100k). If anybody knows of any great agents/brokers around the Indianapolis area referrals would be greatly appreciated. Any help/advice greatly appreciated!

Thanks,

Ryan 

I'm currently looking at a couple properties in Greenfield, IN. Does anybody have any experience investing in this area? Areas to avoid? Types of tenants to expect? Any help greatly appreciated. Thanks!

If worse comes to worse...I could still make the payments to 2nd mortgage and HELOC, I just don't want to miss out on opportunities waiting to save up the comfortable cash down payment if I find something promising. I don't have a particular property in mind at this moment, I'm just beginning to research properties and wanted to know if this was a viable strategy in case something great pops up quickly. Thanks for the feedback!

My name is Ryan Horan and this is my first (of likely many) posts to this forum. My plan is to purchase my 1st rental property in the Indianapolis area before the end of the year. The consensus seems to be that a 20% down payment is necessary since I already have a primary mortgage. We had an addition put on this past year and, as a result, have a HELOC with potential funds for a down payment. It's set at the prime rate but is variable. I'm thinking of paying half the down payment out of pocket, half with the HELOC. Obviously that secures my house to the loan, but it would basically keep me from draining my savings account to throw in a 20% down payment. Thoughts? I'm not sure if this is a typical strategy, but it makes sense to me. I would probably throw the property's cash flow into paying the HELOC off quickly because it will be at the higher rate and I don't need the cash flow at this time. Any advice is greatly appreciated.