All Forum Posts by: Sharon McCants

Thanks for that thought Jeremy.   I guess I've only been thinking about using cash instead of using leverage.  I did see a 6 unit apartment building for $610k.  I've also been focused mainly on Pgh because I have family there who are contractors and can to do any repairs/refurbishments.  

I did see a 6 unit apartment building for $610k.



I did see a 6 unit apartment building for $610k.

 Thanks Alan.  I was trying to do the cash out refi, but I thought 9% was a bit much considering my current mortgage is 6 1/2%. I just wasn't sure if this made sense to get a higher rate, so I thought about selling to get all equity out without paying more by increasing my rate and paying closing costs.  

I heard a guy on Bigger Pockets video give a formula to use to consider if you should sell: If your equity is more than 7 years of cash flow, then you may want to consider selling to get your equity out.  Ex: My cash flow is $1500/mth, so $18k/yr x 7 yrs =$126k.  My equity is $255k.  He mentioned your equity could decrease if neighborhood changes.  Note: I did not include appreciation in the calculation. This makes sense to me and got me thinking about selling.  
 

 Nicholas, I'm sure these are not the best neighborhoods (East Pgh, Penn Hills areas) but I've actually bought a property already in East Pgh for $35k cash and put in $15k (loan) and it will cash flow right away.  I could do more of these, or pay a little more and just do minor rehab.

Thanks for your insight Nathan. Your example definitely makes more sense to use leverage. I guess I'd have to get a hard money loan or DSR since I don't have W2 income (I'm retired), and my DTI ratio is too high.

The Pgh neighborhoods are a mixture, some homeowners and some renters.  Definitely not as nice as current rental neighborhood which is something to think about. I do have a sister in Pgh who recommended her PM so I would use same company, and I don't have a way to determine my potential return on new properties since nothing is in the works yet. But thanks for giving me more to think about! 

Hi, this is my first post and I'd like some feedback from experienced investors. I'm considering selling my rental property in Atlanta to buy additional properties in the Pittsburgh PA area (using 1031 Exchange). My Atlanta property appraised for $320k and I owe $65k at 6 1/2% ARM (with 1% cap/yr). Rent is $2600 and cash flow is $1500/mth.

I initially tried to get a home equity loan on rental, but due to my DTI ratio I ended up with an offer for a DSCR loan at 9% for about $150k equity and over $17k in closing costs, which I turned down.

This rental property was totally renovated from a fire about two years ago and is basically a new home.  My model tenant (best tenant we ever had) will be moving Dec 1 so I'm looking at my options.  The property has had little to no maintenance and it's in a decent neighborhood with mostly homeowners. 

I've seen a number of turnkey properties in Pgh (my former hometown) in the $100k range, so I think I could purchase a multi-family or two single family houses and possibly double my cash flow. 

I'd love to get your suggestions on how to proceed.