All Forum Posts by: Seth M. Jones

I appreciate your perspective, and I absolutely do have requirements for CoC returns. The reason I opened up the conversation about rent ratios is that even beginning investors understand them, and I only had one goal... to get feedback from investors on markets that I should be looking into. Once I am exposed to the market, then the due diligence of analyzing potential ROI comes into play.

Thank you for recommending that I check out Indianapolis and Kansas City. I'll explore those areas further. I would be interested in connecting about Indianapolis, as I've already looked into that market and I'm trying to decipher which areas have B and C class properties... evaluating these areas from a distance it is often hard to tell whether you're looking at a C property or a D class property (which I've invested in previously and now know to avoid). 

Thank you for joining the conversation. 

Thank you for all the follow-up. After some great feedback and additional research, I'm currently targeting a few areas in Texas. 

Great points, but I'm looking outside of the area regardless in order to diversify my real estate portfolio across a few different markets. My area is susceptible to hurricanes and is influenced by tourism, and I'd like to get into a few different markets over the next few years. 

 Absolutely, please feel free to message me directly.

I'd just like to piggyback on Frank and Brandon's input, as I'm an out of state investor who is actually targeting San Antonio and Killeen as potential investment areas. 

Apologies Mark, I was missed that the particular property that you were looking into was for an investment. You're not going to be able to get higher than 80% LTV on an investment HELOC, but TD Bank is known to handle investor HELOCs pretty well.

 My pleasure. Don't hesitate to message during the process if you have any further questions.

Great questions Andrew. This likely is not a good financial decision, but I'll tell you how I typically walk my clients through the decision making process... First, you need to understand how much the refinance will be saving you per month on your payments... forget about the rate for a second. Many people who refinance for rate don't realize that they are increasing their loan size by financing closing costs enough to offset any potential benefit. Once you know how much you'll be saving per month, you need to figure out the entire cost of the refinance (how much out of pocket, and how much lost equity). Then you divide the total cost by the savings per month. This will show you how long it will take you to recoup your cost of refinancing. If you plan on owning the home forever, that's one thing, but if it is a 5-year property than that is a totally different situation. 

For example, if the refinance is saving you $100 a month, and the total cost to refinance is $6000, then it would take you 60 months, or 5 years to recoup that investment. 

Additionally, you'll want to consider what the savings per month means to you, and if those additional savings would help accelerate your investing elsewhere. 

If the benefit of refinancing isn't obvious to you, don't do it. It is likely that your being sold rather than making a sound financial decision.

 That isn't necessarily true, consolidation can help with cash flow in many situations. I've worked with plenty of clients in similar situations, one in particular who took $1200 in minimum monthly payments based on combined debts around $20,000, and consolidated into one manageable payment of around $370 (9.99% interest over 6 years). In this particular case, which is a real example, it freed up over $800 worth of cash flow which they could turn around and use to pay down the debt... Or preferably build up an emergency fund then address the debt after. Depending on income, this is hole that he could dig himself out of rather quickly.

I also would highly recommend Dave Ramsey for this particular type of situation, though I'd be careful not to adopt Dave's credit is evil mentality.

Michelle, many people share your same feeling when first beginning the mortgage process. As Eric mentioned, you first want to make sure you feel comfortable with who you work with, but providing all of your personal financial information is part of the process. Standard documentation that you should expect to provide is:

1. Copy (or picture) of Driver's License

2. Most recent 30 days paystubs

3. Your most recent 2 years W2’s

4. Your most recent 2 years complete personal tax returns (All pages)

5. Most recent 2 months Bank Statements 

This can vary from lender to lender, and can vary depending on the loan program that you are pursuing, however this is completely normal. The reason why all of this documentation is required, in a nutshell, is to prevent mortgage fraud and also to prove to the lender that you are in fact a qualified buyer who is able to repay their significant investment into your real estate business.