All Forum Posts by: Micah Shelton

Thank you both for the reply...super helpful in figuring this thing out..

I bought a cool house back in 2020 that was historically being used as a duplex. Two of everything except Electric and Water service. I have it operating as such to this day. I went to refi and pull some equity out and they asked if it was a SFR or Multi. Per the city it is still a SFR as it was not permitted to be a duplex or SFR with an ADU.

Per the City codes folks she said I could do nothing or go through the permit process for either and get the dual spaces approved. Challenge being if it doesn't meet one of their code requirements I have to fix those issues. I feel confident it would pass with possibly minor changes. 

If I do nothing this could effect how I sell it in the future, could effect refinance options, ect. Per the city they are waiving the 10k in potential permits if I go the ADU route but you have to sign a 10yr no short term rental clause. Go the duplex route you gotta pay the piper..

Would appreciate any guidance.

what is the exact date of the next meetup, would love to attend. 

Snapshot of issue:

I have accumulated 5 small multi-families. 4 in Indiana, 1 in Portland, OR. Through that have had to heavily renovate one and two others with significant tenant turn over needs this past year. I have about $200k in various forms of debt out there that needs to be paid. 70k on a HELOC, 70k on a private money loan (5% interest only), and about 70k in credit card debt (some with higher interest, some with 0% for a few more months)

One rental has about $250k in equity and I have held it over a year. Would it be better to sell it, pay capital gains (estimated $50k) and wash all the debts away. Idea being its a sellers market, its at its peak potential value right now. This home brings in $12k a year cash flow, vs $200k now flow.

Or...Refinance my primary and pull an additional 100k out, add a HELOC to the above mentioned rental at around $100k. This will add about $1000 per month in additional fees eating up the one rental homes cash flow but allowing me to keep all 5..

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Makes sense. I think in the example from the pod cast it was strictly owner financing situations. Thanks for the replies super helpful.

In a recent pod cast the interviewee stated he lowers the interest on his loans from sellers and increases the price, or shortens the term so as to increase the principle payment. This made it so the seller paid less in tax due to interest being taxed at a higher rate than the principle.

Would the same be true of private money lenders on investment property purchases?

I have been buying mid-west properties using investor funds at 6-8% amortized over a 30 year period. These are high cash flowing properties that may need some work to stabilize but will appreciate as well over time

If I buy a place for 100k at 6% I am paying $30,0000 in interest over a 5 year term. (amortized at 30 years)

But, if reduced to 3%  but borrow $130,000 Im paying $19,500 in interest over 5 years...Then I have to pay back the $150,000 netting the investor $50,000 equity profit he/she would have to pay tax on as long term capital gains...and the $19.5 in interest taxed over that five years.  They make more over the purchase of the property, I get an additional 30k for renovations and cheap money.

Just trying to make sure Im thinking of this straight before presenting it on the next purchase.

@Brandon Michels Let's find a time to have one we both can be at! Im trying to get the ball rolling out on the east side of Portland.

Tuesday and Wednesday event.

Local lender discussing state of Portland Buying market and effects on 1st time home buyers

Side by side comparison of two investment properties. One in PDX market and other in Indiana

Opportunity for future multi-family commercial investing

Tuesday and Wednesday event. 

Local lender discussing state of Portland Buying market and effects on 1st time home buyers

Side by side comparison of two investment properties. One in PDX market and other in Indiana

Opportunity for future multi-family commercial investing