All Forum Posts by: Tim Palecek

I'm not familiar with the book but sounds like Brrr method. Buy renovate rent refinance. If he is initially buying with cash he has 100% equity in the property. Say that after he renovates, the property is worth 100k. He could get a conventional loan to cash out a portion of that equity and use it on the next deal. 

I'm just starting out myself, but I have read this question on these forums countless times and people get a variety of answers.  Often I hear "house hacking" being a suggested great way to get started.  Buying a multi with low/no money down and living in one of the units.  I was attempting to do this with the purchase of my first home but I came across such a good deal on a single family home that I couldn't pass it up.  Good luck in whatever you decide to do!

Welcome Connor, you've definitely come to the right place.  I haven't been here long and have already learned so much!

Your best bet is to really take your time and explore Bigger Pockets.  A good place to start is the beginners guide.  From there I'd hit the bigger pockets podcast, blog, and sift through and subscribe to the forum categories you are interested.

Good luck!

Here's my situation. I am in the process of refinancing my home with the main purpose of dropping PMI and getting a better interest rate. It is a 30 year fixed locked at 3.99%. The appraisal came in slightly higher than expected and I have just over $100k in equity. My initial plan was to take 0-$10,000 cash out just for home renovations, and hold my equity and eventually take out a HELOC to use for my future real estate investments.

I'm starting to second guess my strategy and am wondering if I should be taking out more for a down payment(or potentially a full purchase) on my first investment property.  They will fund up to 95% of the appraised value.  I was thinking of possibly taking out ~$50k which would make my monthly payments almost identical to what they are now.  I'm worried about this option because, while I have been doing a ton of research on my area, I haven't yet been actively pursuing any deals.  I'd hate to be paying interest on money that is just sitting in an account but it still may be one of my better options.

I realize that there is probably no definitive answer, but any input is welcome, especially if there are any concerns or different options that I have overlooked.

Speaking as a contractor and a RE newbie I can think of 1 more train of thought that I have run into.  "The guy in the BMW is making too much money, so I will probably get a better deal from the guy in the Honda."

As a contractor I have had both kinds of clients, the one that wants to see that brand new 2015 pickup nice and clean, and the one that wants to see the 1995 with 200k miles on it with paint drips down the side.

Personally, I would likely take Eric's first train of thought and go to the guy in the BMW.

Thanks Tom, I'll take a look.  Fresno isn't too far from home.

Robin, good to see another local investor!  That's very true, I think CSU Stan is definitely a major reason for the high prices.  I live less than a mile from campus so I think that is one thing that I owe some of my equity to.  That would make sense if Merced followed the same trend.

Dmitriy, thanks for the welcome!  I'm certainly glad to have found this place, I learn more and more every day!

That's true Mary!  And it definitely is expanding, I'm actually bidding the paint jobs on some of the stuff going in there.

Craig, thank you for the advice!  I had read some about home equity lines of credit, but didn't give it much thought since I assumed it would  have a much higher interest rate.  I guess I was thinking more of unsecured lines of credit.

My interest rate is 4.5% so I assume I can get it down about a half a percent. The big thing though is I'm paying PMI, which really feels bad when my LTV is probably around 60-65% now. I figure I will be refinancing regardless of whether I do cash out or not to get rid of PMI. Even so a home equity line of credit sounds pretty hard to beat. Half a percent for 6 months sounds amazing for flips.

Thanks for the welcome Terry, glad i found this great resource.  

Found the video, they did very nice work.  Good to see that the rehabbers are still around.  Back in 2012 we did all the painting for a very large company.  We painted over 130 houses for them in 1 year, and then they moved on because we went from 3 houses a week to nothing at all.  

Yeah that area does seem to have potential.  A huge part of Turlock is just so highly priced, it seems like the demand for homes is huge and rising every day.  Turlock as a whole is really becoming the place to be.  It seems more and more people are trying to move to and do their shopping in Turlock instead of Modesto now.  The whole main street area has absolutely blown up in the last couple years.

Hello Mary! It really is. Theres so much here, sometimes its hard to know where to begin. I've just been reading everything that catches my eye and listening to the podcasts when I have spare time.

Thanks for the welcomes and tips. Turlock, my home town, would be great but prices here seem to be very cost prohibitive.  Ideally I would like to buy in or around Modesto, but really anywhere within about an hour of Turlock would work.  I'd like to avoid anything long distance at least until I have some experience.  I am a painting contractor and have construction contacts in my immediate area so staying local will drastically simplify the rehab process.

I'm still very much in the learning mode right now, but will certainly also be keeping my eye out for potential buys and ways to finance them.  Oh and I am starting the process to become a licensed real estate agent.  I don't know how much I will gain from having it but I don't see a downside with such a low cost of both time and money if I can gain some knowledge in the process.