All Forum Posts by: Tim Herman

@Andrew Sweeney even with an appreciation play. and a $100000 to invest. I just read that the bay area growth has slowed to 5%. Buy 1 house outright and at the end of the year 10 it is worth  $163000. Control 5 houses with 20% down. $80000 mortgage  in 10 years the payoff is $65000. $163000-$65000= $98000 x 5= $490000.

@Milla McCammon you need to find out the steps of the foreclosure in your state. Where I am between 30-90 days a letter is send to the mortgage holder. The first public notice is when they file in court. Court order then advertise in the public paper for three weeks. Then the public sale. example mortgage amount is $80000+ fees this is the bid the bank will start with. Anything over this will go to the mortgage holder. I am in a right of redemption state. They can cure the foreclosure up to 60 days past the sale by paying everything back.

@Rickard Risberg  using @James Mc Ree numbers your $5000 is actually $25000 for buying 5 properties for your same dollar investment. Leverage is your friend. Housing prices keep up with inflation. Use 3% and a 10 tear time line. 1 house for cash is worth $130000.  leverage house mortgage will be down to $65000. $130000-$65000=$65000 x 5=$325000. What is in your wallet.

@Yollan Kitsoukou Need more numbers. You have to have a reserve account for vacancy, repairs, CAPEX. What is the gross income? BRRR 70% of $157000= $109900 cash out mortgage. According to your numbers you will be at $120000. There is a calculator under the tools section on the web site. You can use it up to 5 times before you have to join pro. You can use the Rental Analysis Template not as thorough as the calculator. Without your reserves if you need a new roof you will have to pay for it out of pocket.

@Matt Berklacy lease option you still own the property so it is subject to landlord tenant law. Depending on how you write the contract up you can pass on some of the repair costs. It is rental income and you still get depreciation. You will get a lump sum when they exercise their option. 

@Tim F. a calculator and leverage are your friends. Assumptions You pull out $100000 heloc.  your choices are buy 1 house all cash. 3 houses with $30000 down with $10000 reserve or 5 houses at $20000 down. Rent on houses following the 1% rule=$1000. Using the 50% rule on expenses=$500. 10 years down the road houses worth $150000(less than 5%). House bought outright= $60000 income+ $50000 appreciation= $110000. 3 houses bought with 30% down. Mortgage paydown=$56000. $150000-$56000= $94000 equity x 3= $282000. Debt service is $375 out of the $500= $125 per door/per month=$45000 income. 3 properties yield  $282000+$45000=$327000. Almost forgot the $10000 it will grow to less than $11000. The 5 houses debt paydown=$65000. $150000-$65000=$85000 x 5= $425000. Debt service $429=$70 per month profit. $70*5*12*10=$42000. 5 houses= $425000+$42000=$467000. What choice so you want to take.

@Account Closed went a meetup on this topic in PA. If there were 12 on time payments the loan underwriters would take the loan out of the DTI. Don't know about Texas.

@Dain DaVirro Like @Theresa Harris said you can live off the equity. Example: 1 paid off $100000 house.  $10000 down seller finance @ 6% for 15 years= $ 809 per month. Learn to use calculators they are your friends. 

@Dain DaVirro It is based on how much excess cash flow per property. If you figure repairs ,CAPEX, vacancy, property management and any other expense for your property and it shows $200 a month positive cashflow. That is yours to spend any way you want. You want $20000 a month then buy 100 rentals. This scenario doesn't include mortgage paydown or appreciation.

@Jared Garza I haven't done one yet, but it could be a lease option. Type in sandwich lease in the search function.