All Forum Posts by: William Sing

Hey Ronald! Rates are a big thing to look at, but they are only part of the equation.

- Is this a variable rate or fixed rate? When it comes to the HELOC you are going to want to know if this is going to be a fixed interest rate or variable. Variable is typically a certain % plus the prime rate. The prime rate will change monthly/quarterly/yearly depending on what the Federal Reserve does. With variable rates, you have a lot more fluxation that is possible. Currently, I know the prime rate will be increasing at least twice this year. Variable rates typically are lower for now whereas the fixed rate is typically a higher rate but won't fluctuate as much.

- What are the closing costs? Many banks that I have interviewed will cost anywhere from $1k to $0 depending on the situation. If you need to do a desktop appraisal there is a lower cost than ordering a full-on appraisal. Where I'm at I'm seeing rates from $700-800. Some companies will not charge any closing costs unless you close the account within 3 years. 

- What is the Minimum Monthly Payment? This will help you budget costs and understand the bear minimum you need to pay off the bills. 

- What is the draw period? I've been seeing about 10 year draw periods for the most part, but longer will allow you to carry the debt longer. After the 10 years, whatever is the balance will be amortized over X years depending on the bank. 

- Do you offer any interest-only options? For the most part, I have found a lot of HELOCs will be based on the principal and interest. Interest-only would give you a bit more freedom and you won't have as large of payments. 

- What is the maximum LTV? This is good to know to see if you can get the cash you need. In a lot of investment properties, you can only get 70% (sometimes 75%) LTV which isn't fantastic. With owner-occupied you can get a lot more (closer to 80-90% LTV). Make sure you understand what you are optimizing for in terms of the amount of money vs rate.

- How long does the process take? This is something good to know about if you need the line established quickly. Some places have been taking 4-6 weeks whereas others can be 2-3. 

- Are there any annual fees? This is good to know to calculate how much you might be losing if you use smaller amounts. 

- Is there a minimum initial draw? I haven't seen this as much of an issue for most banks I have talked to, but it is good to know if there is. This might limit your ability to just draw a few grand to do what you want with it. 

Are the PMs all in separate areas? If so, probably using something like podio where multiple users can log in and view details would be helpful. The biggest issue is if the PMs use their own software and they don't have any APIs. You may be able to have certain systems communicate with each other if they do have API's or have some sort of automated email that asks them to update their system with certain activities. 

Congrats on getting the deal in the first place! There are a couple different factors to consider:

- How much money do you need? If this is a small amount 5k or less and you have the funds it might be something where you can split the amount or you contribute a bit more. 

- What is your relationship with them/the expectations you have setup? When it comes to renovations costs, it is common that they go over what you are expecting. If you set the expectation that this was going to go over budget and said if this happens, here are our options I think you have set up that conversation. If this is a closer relationship where you have some social capital you can also rely on that to get you the money as well. If it is purely about money see if you can maybe pay in interest a bit more for the charges. 

- Other options: See if you can get another short-term loan from someone else where you pay interest. Another option is to put a lien on a property as collateral and pay off the lien when you do the refinance part!

Congrats on adding a new starting with the Duplex! I forget what episode this is but there was someone up in Seattle doing something similar to this, but he talked with a builder who then helped him find the bank financing since and they understand a bit more about what is needed to make the financing work. I think that if you are going to GC your own job, I'd talk to a couple builders and just get to know the process in your local market and understand a bit more about where it is easy to build and where it is not. 

Hey Carl, congrats on getting started in the first place! 

I'm not sure a HELOC would help since a lot of them are only a 70% LTV for any investment properties. You get a lot more as an owner-occupant. So I'm not sure how much capital you could really pull out of it. Interest rates are most likely going to be in the 4-5% for investment properties (if not higher) and am not sure if it would kill your cash flow/ability to save more for the next property.

With that, I think that you could try to find off-market deals, but it would make things a bit harder in the sense that you'd have a lack of time. Not sure what you can do to increase your pay via the military, but it might be better to work the agent angle and send out mailers or something where you combine the agent and investment property side. Saying that you can buy their home but if it makes more sense to list you can do that too so that way you could make some money/investment either way. This way you are using your RE license to find both listings and investment properties. Make sure to check with your local rules/regulations but you could also partner with investors in the area so the owners have the option to buy cash and you'd get a referral bonus from it. 

Overall, I think that combining the ability to find off-market deals and using your agent license is going to be a good way of making you more money for the down payment or will give you more options in the future. 

Hey Isaac, usually the attorney plays more of a role in the paperwork and making sure everything is above board on the transaction. You would do more of the marketing (if you don't have an agent). They are usually about $2500 here in Oregon, but not sure about Columbus. 

This is one of the things that freaks out a lot of first-time home buyers. If you have a higher price point and you are dealing with people who understand homes a bit more, I wouldn't worry too much. I would just make it very clear to your agent to emphasize that these will be fixed prior to closing. If you can find a good drywaller, these fixes shouldn't take too long. When you get photos done you can also make sure these are not very apparent to at least get the "coming soon" photos. If you have a good agent, they can help guide you through this a bit more. 

Let me know if you need any agent recommendations :)

I'm sorry to hear this is a reoccurring problem! 

Good call on getting the original contractor out there to check it. Not sure if this is possible, but I would use a hose after the work has been done (if it needs to be done) and spray the roof. That might be something that would be helpful to find the leak. The other potential is that is coming from another place but ending up at the chimney. I think that bring out another contractor might be helpful but also finding someone with a moisture meter to help identify it might be helpful. This Youtube video can kinda explain what the person would do without getting too invasive. 

I hope this helps a bit!

Hey Melanie!

If you are looking to buy a STR, I think you would need to find an off-market deal to make it possible. Doing some sort of seller financing would be ideal since you don't necessarily need a down payment. You can do this by driving for dollars, mailers, etc.

Another thing to start looking at might be STR Arbitrage. This would be where you rent out a place and turn it into a STR. Know that a lot of bigger landlords have added in their contracts to not allow this. But you look into smaller mom & pop rentals that might want this. You'd want to be up to date with the laws and regulations around it but it would be a way to just pay for the security deposit and then start generating income from the unit to then fund actually purchasing a unit.

Just a thought on how you could potentially make this happen or start your adventure!

Nice Job @Alex Williams!