All Forum Posts by: Sara Liskey

@Chi Wen Rent in CA and invest out of state. SF Bay Area is outrageously expensive!

@Matthew Franklin I prefer cash out refinance. Interest rates are still extremely low and you may want to lock that in on a 30 yr fixed rate. HELOCs are typically shorter term with an adjustable rate.

I would double the maintenance assumption for this area and be sure to look into the landlord laws, especially around city inspections. I would also increase vacancy assumption. City inspections add time to your turnover, as you are at the mercy of their schedule and repair requests.

@Whitney Bowling I love turnkey and new construction!! My first three properties are now producing infinite returns. I’m on the refi til ya die plan for now. Slow and steady!

Typically you can get a better interest rate on your primary residence. If you plan to pull cash out to buy another property, do it in one shot. You don’t want to pay closing costs twice. I recommend you lock in a 30 yr fixed rate loan. When I started, I used a home equity line of credit to purchase my first rental property. Later when values dropped it got a little tricky, which is why I recommend you lock in the 30 yr fixed rated vs a line of credit. Make sure you keep a good amount of cash reserves if you pull cash out of your primary! Don’t take on more debt than you can handle.

@Tim Sipowicz Personally I would keep it. You probably got in with little money out of pocket. If you can refinance now to improve cash flow, do it before you turn it into a rental. Rental property financing is not as favorable as a primary residence, but still pretty incredible right now. Be sure to screen your tenants and make sure you have enough cash reserves to cover future vacancy and maintenance. We’re likely headed into some challenging years, but if you can hang on and continue to build, you will thank your future self. Good luck!

@Tim Sipowicz It depends on the rent to value ratio. How much is your property worth and how much will it rent for? Keep in mind Chicago is not the most landlord friendly market, but depending on price point, the cash flow may be strong enough to justify keeping it as a rental. Downside is extremely high property taxes!

I totally get it. I have an emotional property too. Lol. It comes with an opportunity cost but I have Relatively low debt on it and good cash flow. Not to mention the timing. We are in uncharted territory right now. Not a good time to have a Highly leveraged rental property that does not make sense. If your tenant does not pay, you’re left carrying the bag. 

@Yinglu Wang

Yes invest outside of NY where you can find better rent to value ratios and landlord friendly markets. You need a good local team, including someone who can source properties as well as a good leasing agent or property manager. The agent and/or property manager can pull comps for you. I’m from SoCal and have properties in Houston, Atlanta, Memphis and Little Rock.

@Ricardo Peterson I’m from SoCal and have properties in Houston, Atlanta, Memphis, Little Rock and one here locally that I purchased many years ago. The rent to value ratio is low in CA and it’s very landlord unfriendly. I like markets with better cash flow that are landlord friendly. Phoenix would be better than CA for sure, but still may not cash flow as well as many other markets. You can self manage or hire a property manager. Don’t let distance discourage you. It can definitely been done remotely. You need a great team. Happy Investing!