All Forum Posts by: Libby Baugher

I have a question regarding which loan to use for my rental properties. Here is some background on me. 

I am 51 years old and am just beginning my real estate portfolio. I have a good paying, secure job making 6 figures and I don't spend much money. I have a mortgage payment on my house (15 yr loan) and have 12 more years to pay it off. My goal is to get between 3000 to 5000 monthly passive cash flow within 5-7 years. I've looked at turnkey investing and local investing and have decided to start with local investing because I will get higher cash flow doing local. I have a friend who is realtor and she is quite knowledgable about real estate investing and in fact finds homes for investors, brings contractors in to do rehabs and has a team that does property management. 

I have just gotten an appraisal on my primary home and am waiting the results although it should come in around 60000-70000 to use as HELOC. I also have a non retirement account worth about 65000 that I have set up so that it is attached to my checking account if I need it for anything real estate related. In addition, I have a 401k worth around 65000 but am not sure I will use that for real estate. I have other retirement accounts that I won't be using as I don't want to be taxed when I withdraw money from them.

My hometown bank gives a maximum 4 mortgages per person and I've already used one up for my primary so I have three mortgages left with them. I'll obviously need to find other ways to purchase more properties. 

The price range for my purchases will be between 40000 and 80000 (I live in central Illinois) and I've noticed some homes in this range are already rehabbed and some need rehabbing. I look at both groups. Between the realtor and friends who live in the city I'll be purchasing in, they can help me to determine good neighborhoods....I'll be able to determine this too as I grew up in a small town right outside of the city I'm purchasing in. 

Anyway my question is this.....due to my age at starting out, I'm wondering if I should use 30 year loans or 15 year loans. I can understand if I was 20 to 30 years younger I would be using 30 year loans all the way. But now that I'm older and hoping to retire within 7-10 years, I'm wondering if I should use 15 year loans and get the houses paid off and then have full cash flow from all the homes. This would also help with not having to purchase so many homes before I retire as I would get that full amount of monthly cash flow for each home. I figure I'll need at least 10-15 homes to get to my monthly cash flow goal but I see two different methods to attain this.....get the homes paid off (fewer purchases and I'll be helping to pay off the loan) or use 30 year loans (more purchases but I will not be helping to pay off the loan). 

Any thoughts and advice would be great!

Libby

Will it help at all with being able to get more loans? Right now I’m able to get three loans from my local bank for real estate investments (I already have my primary mortgage with them). After 4 I’ll need to start looking at other banks. I remember reading somewhere that repealing Dodd Frank will banks being more willing to give out more loans. 

Can someone please explain to me if and how a repeal of Dodd Frank will help real estate investors? 

Thanks

Any central Illinois wholesalers out there?

Hi all, I'm curious how everyone goes about locating realtors who are also knowledgeable about real estate investing? I was originally thinking of using the realtor that I used to purchase my home but then realized that she may not know much about real estate investing. Besides posting on Bigger Pockets for realtors who know real estate investing, would I just contact realtor companies and ask? I have visions of all realtors saying they know real estate investing (when they don't) just to get work. 

Thanks for any advice!

Libby

So if I can have 10 conventional loans and my community bank only allows 4, can I go to another bank and get the remaining 6 loans?

thanks Shawn! 

Hi all, I have been reading up on the BRRRR strategy and have a question about. One of the R's is refinance....how many times will banks let you refinance? Is there a limit on how many times you can refinance like there is for conventional mortgages? Say you already have a few houses that have been refinanced, will banks continue to refinance more houses for you?

Thanks in advance for any input you give!

Hi all, I have been reading up on the BRRRR strategy and have a question about. One of the R's is refinance....how many times will banks let you refinance? Is there a limit on how many times you can refinance like there is for conventional mortgages? Say you already have a few houses that have been refinanced, will banks continue to refinance more houses for you?

Thanks in advance for any input you give!

Libby

 Hi Jessica, I've actually thought about it passively for the past 3 years. But lately have been thinking about it more seriously as I've been thinking about my retirement years more and more. And realized with my family's past health problems, I should think about having a "paycheck" every month during retirement like I do now to cover monthly expenses so I could use my retirement account money for bigger things such as vacations, health issues, etc. Plus after I started analyzing properties, I realized I enjoyed doing that.