All Forum Posts by: Travis C.

Just an update. Refinanced 3 properties and pulled cash out. Refinancing last original rental currently. After cash out on 1st three rentals, we already closed on a property here in San Antonio that was a foreclosure for $166k all cash. Adding new flooring, paint, and plan to rent out for $1400/month and am already moving to pull out cash on this one with conventional 30 year financing. PITI will be about $1050 so we should cash flow $300-350 per month. Will be ready to buy another one in a few weeks after finance closes. Based on my good buy on this one and if I can keep drumming up deals, I think we can keep hopping these for hopefully the next year or so if the opportunities arise. I would like to end up going from 4 rentals to possibly 14-16 in the next year or so, but just depends on market I guess. San Antonio seems to be a good market for this buy, rehab, rent, refi strategy right now.

@Upen Patel, can we talk sometime?

I appreciate this discussion. I revert to #1. The means to refi as discussed here are intriguing, as well. 

Thanks guys. Very helpful. In it for the long haul and option#1 seems the winner. 

I guess I could do that, but it has simply not been on my radar because I have been so used to SFHs and eager to replicate...Really appreciate it and perhaps I should look into it. 

Hi, and thanks everyone for the responses. There will be no seasoning period on the first 4 to the be bought under option 1 because I have owned those properties for between 3-5 years. I may try to go bank financing on the 1st cash outs since they are all paid off.  Where seasoning could come in would be after pulling cash back out of the ones that have been bought with the other original cash out funds. However, I have a private lender willing to work with me out of Austin and there is no seasoning period I do not believe (based on a conversation I had with them a moth ago but reconfirming now). They will amortize the note at 30 years fixed rate around 7.5%. A bit high but I can still cash flow the properties at around $300-350/month which is fine by me. 

The end game in either option 1 or 2 Icguess is that you acquire as much property as you can, but option 1 uses borrowed money to keep buying entire properties until you are out of money to borrow and option 2 puts down 25% and you acquire many more properties but fees rack up on origination l. Cash flow roughly equal on both options. 

@Paul Rodriguez that is awesome and I knew I posted this here for a good reason. Had not even thought about the origination points!! That is one dynamic to add to my consideration, but the downfall to option#1 is some lost leverage on long term asset gains (not cash flow since both options cash flow roughly the same). Hmmmm thanks!!!

Hello,

I read these forums from time to time and have found them to be very helpful. I wanted to pose the following scenario to see if anyone has any thoughts, as I am always interested in hearing multiple angles. My wife and I just finished paying off the mortgages on our 4 rental properties in San Antonio. Total equity is roughly $500k-$550k. We are ready for the next step in our investment path, but this is where I am stuck. I do consider my decision point to be a good problem to have, but just looking to bounce some things around.

Option #1: take out a 75% LTV cash out refi and take the money and buy 4 rental properties each. Then take the 4 new properties and do 4 more cash outs and keep repeating this until there is not enough money to buy any more while properties with borrowed cash from cash out refis.

Option#2: take out a 75% LTV cash out refi and take the money and buy as many properties as possible with 25% down. Would be about 10 properties with $40k down on $160k properties. I have a lender who will do as many loans as I need at 75% LTV. Each one would cash flow $350 month.

Essentially, there is little variance between monthly cash flow for option #1 and Option #2, but would it just be more advantageous to do option #2 due to leverage considerations because there would be more properties involved? I'm not doing any major rehabs. I can handle some rehab, but mostly only minor cosmetic versus some major overhaul although I only mention that as an aside, as it is not really important for my decision I don't think.

Please let me know what you think. If you want to throw out other options, then this is what I am here for, too. 

Many thanks!!!!