All Forum Posts by: Travis Dawson

I'd argue that you are more likely to see changes to AirBnB - stricter rules, maybe even a tax, or something like that rather than an outright death.

The supply will become more and more saturated and profit margins will become slimmer in most areas. But will likely remain profitable when well ran for the foreseeable future.

Still, always smart to have an exit plan.

Awesome. Thank you for setting this up!

I haven't done this myself, but there are a lot of companies like this. Some good, some bad.

Key things to keep in mind: 

1. Your cash flow will be lower than if you did it yourself.

2. It will be hard to sell for a profit in the short term if you need to get out because you won't have much equity built in due to buying it for an inflated price.

3. They will put their profits above yours. Do your diligence. 

@Steve Vaughan probably hit the nail on the head. But rather than buy more houses, why not diversify into other avenues for investment? Index funds, notes, invest in a small business, etc.

@Jayme Jahns I'd really have to know more to give more advice, and honestly there are more experienced people than myself who can probably help you more. But I will try to take a stab with some general advice.

How large of a HELOC were you approved for? If it is large enough you could buy a rundown property outright, fix it up, rent it, then refiance to get your money out. This is called the BRRR method on here and many people have been very successful with it.

You could also try a Cash out refinance of your home instead of a HELOC. On paper it shares some of the same risks of a HELOC, but I believe it would be easier to get traditional financing this way. There are a few mortgage brokers on this website who might be of better use. But thats how I understand it.

Cards on the table I think the way to go starting out would be to save up for a down payment and keep a HELOC for emergencies.

 Sorry to invade this thread again but I just saw this.

You should be very, very, careful about using a HELOC for a downpayment. When people use a HELOC they are usually looking to purchase a whole house (or sometimes money for repairs after a purchase). Fix up the house, sell it, then pay back the HELOC in full.

By using a HELOC for the down payment you have no way of quickly paying that money back and will basically have two mortgage payments on your investment property that are both due every month.

I also believe you will have a very hard time closing on a conventional loan this way. Banks won't let you use borrowed money for the down payment (make no mistake, a HELOC is borrowed money). You could try to get around this by taking a HELOC and letting the money season in your account for a couple of months, but then your DTI will likely be beyond acceptable.

 Eastern Washington is a big area to make such a wide sweeping claim. In a small farm town sure. It could be hard to rent out a property. But Spokane is a city with a strong rental market.

Can't say I'd recommend buying a "business" that doesn't make money.

First thing I would look into though is can you lower expenses and increase revenue?

Here is the best piece advice I can give you. The math either works or it doesn't. If you try to flub the numbers you are only hurting yourself. 

You ran the numbers with capex and maintence and were in the red. Full stop. 

You've already got plenty of good links to an in depth calculator. But you also should ahve a few "quick and dirty" ways to examine a property to determine if its a quick pass or if it is worth diving into a bit deeper.

There are a few different ways and people all swear by their own. What I like is to take 50% of what I think the monthly rent income would be and subtract what I roughly think the mortgage payment would be. Whatever is left is roughly your cashflow.

If l like that number its worthwhile to go deeper, if not, move on.