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All Forum Posts by: Tim McKelvey

Tim McKelvey has started 1 posts and replied 32 times.

Post: BELOW $50,000 MORTAGE AVAILABLES?

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19
@Joe R. You might try asking a real estate agent for a referral. I had the same issue, but my agent referred me. They did grt a couple points up front to pay for processing the loan. But it worked out.

Post: Newbie from California

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19

@Jacob Rascon

I am also a newbie living in LA county.  Welcome.  Hope to see you around the site.

Post: Pay down debit or invest in a new property?

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19

@Aubrey Hardman

I agree with @Jeff V. 

Leverage to buy more properties is typically best.  However, you should consider how much leverage is right for you.  You do NOT want to be exposed to heavy debt in an economic downturn if your renters suddenly disappear.  

Looks like you are from a small town in Iowa (my wife is too).  Is that where you invest?  Did you investigate what happened to rental prices and the demand for rental properties following the crash in 2008 (in the location you are investing).

In many places, values dropped 40-50%.  I doubt the next downturn will be that dramatic, but if prices dropped (some) and renters disappeared, what would be your exit strategy?  Would you sell some properties?  You want to have enough equity so you are not upside-down.  This at least keeps the option of selling the property in play.

Post: Hello, looking to get my first rental property

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19

@Heather Collins As far as rental properties go, the east side has the lowest prices, but I typically would not go there at night.  The west side, prices have climbed so much in the past couple years, I am not sure if it makes sense. For me personally, I never considered investing in CA because the laws are not friendly to landlords.  Because of that, I really never ran the numbers.

Post: Hello, looking to get my first rental property

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19

@Heather Collins Welcome to Bigger Pockets.  I am pretty new myself.  I live in LA County (up in Palmdale).  I recently bought my first rental property.  I went out of state (North Carolina).  My son is a real estate broker and property manager and he deals with investors.  So I had a little comfort factor with "boots on the ground" with someone who knew the area really well.

Best wishes to you, and welcome!

Post: Down on Investment Property

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19

For the most part, I agree with @Thomas S. If the property is not cash-flowing at 25% down, you may have an issue. However, your situation will dictate what works best for you. For example, if this property has high taxes, an HOA fee, or you had to pay significant points/origination fees for the property, it MAY make sense to put more cash into this property before you buy another (esp. if your goal is only to buy a handful of properties). You have to run the numbers to see (see below).

Many people look at the percntage return (ROI, etc). However, you can't spend or invest percentages (a relative figure of merit). You can spend and invest actual dollars (an absolute figure of merit). So if you have another $$25K (or however much) to invest, you want to know if it will return more total money to you buy investing in the current property or investing in another property

Try running the numbers with 25, 50, 75, and 100% down.  Then consider how much return you would get by using the same amount of money to buy another property.  Wherever the numbers turn out better is your best investment.

Best to you.

@Allyson Edwards I just did a quick Zillow search for properties in Statesville that rent from $1500-1750.  There were 2 properties listed, and yours was one.  From this, I would conclude like others have commented that your price may be higher than market rent, or higher than the market can support.

Good luck with whatever you do.

Post: Using VA loan in investment properties

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19

@Kevin McGevna

As you consider investing with a VA loan, you want to be extra careful to make sure the numbers work. While VA is a great way to get going with literally no money down, there are drawbacks. As @Adam L. pointed out, you must live in the property for a year first. Also, if you go zero money down, and the VA funding fee gets wrapped into the mortgage, you essentially have negative equity. So, if you just by a nice primary residence SFR at retail, it can be very difficult to get cash flow when you do move out. Many military get into trouble thinking, "if I PCS, I will just rent the place out." The never think that they may still have several hundred dollars a month in negative cash flow.

What part of Tampa are you in?  We just moved from there in 2015.

Cheers,

Tim (USAF-retired)

Post: Newbie from Palmdale CA

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19

@Dmitriy Fomichenko,

Thanks for the welcome and the link to key BP resources.  I appreciate the help.

Post: Newbie from Palmdale CA

Tim McKelveyPosted
  • Rental Property Investor
  • Posts 32
  • Votes 19
@Ali Boone, thanks for the kind words and intro. I bought in the Coastal Carolina (NC) area. My son is a broker and property manager there. He is the one who introduced me to BP. Since he has a property management company, he has some go-to contractors that he trusts. So it was "relatively" easy for me to invest from afar. I will definitely take a deep dive into your website over the weekend. I look forward to chatting w you some more. Tim