All Forum Posts by: Todd Rasmussen

Hi Jerry,

I haven't found a conventional lender that'll let you borrow the down payment. You'd have to draw on the HELOC and sit with it in your account for enough time that the banks don't look for the origination of it. (three months on the mortgages we've applied for) After that you'd have to pay it down for your next down payment anyways, so might as well just save up for the down payment instead of borrow for your strategy as I understand it.

I think the most effective strategy for using a HELOC would be leveraging it so you could make cash offers on discounted properties.

I read your other post and saw a lender say the HELOC could be used for a down payment... Let me know if they or someone else comes through for you to that end.; that'd be a great contact.

Hi Adam,

I wouldn't pay down the mortgage just for equity to borrow against. If you have positive cash flow on the property (and that's how it shows on your taxes too) Then you can use the cash flow as additional income to qualify for another loan. If you pocket the cash flow and hold onto it for a down payment on the next deal, you will be able to leverage that money 5x as much as if you borrowed it from yourself. You should be able to pick up several properties before a traditional lender starts to flinch at your application.

Todd

Hey Kevin,

We have a SFH in Franklin Township that we are really happy with. Bates-Hendricks doesn't look like the worst area, but schools rated pretty low and higher than average crime for Marion County. Try Trulia for an overview of crime data.

Orange peel is easier. Spray and walk away. The knockdown requires you to run a knockdown knife over the ceiling after you spray

Hi Jennie,

We've been talking to our lender about similar strategy. HELOC's are usually only available on your primary residence and not on an investment property. If you are looking to access equity on a rental property you would need to cash out refinance. I can PM our loan officer's information if you are looking for someone.

Todd and Elyse

Hi Tom,

I'm organizing LLC out of Wyoming. They offer the ability to elect federal tax status and you can opt to be taxed as a partnership or sole proprietorship and avoid tax at the entity level. They also do not maintain ownership information of LLC's on state public records.

The only way I've heard of flow through taxation using a corporation is as a s-corp, but then you'd have to justify active participation in the business to the IRS (which I can't do as my investment activities are passive. I'm out of CA so I will get taxed on the business income even though Wyoming doesn't. Such is the price of perpetual summer I guess.

One size doesn't fit all so make sure you adequately research for what's right for you. Depending on your existing underlying insurance coverage, getting a PLUP worth a couple million and having asset protection across all your liabilities could be an option too.