All Forum Posts by: Tyler Mutch

@Jimmy Mooney using a HELOC to fund an FHA is different because these are both products associated with a primary residence. So when you move into the FHA home the HELOC would technically be called due.

In regards to the LTV of the two, I was able to do 100% LTV for a HELOC. But only 75% LTV for a cash out refinance, so the HELOC gives you more, but then you're literally tapped out. Like I said previously, it's a good strategy for growing your portfolio as long as you're comfortable with the numbers being able to cover the payments you'll be accruing from both the mortgage on the FHA property and the added payments from the HELOC.

The other thing that may be important would be to have an exit strategy. How do you plan to pay the HELOC off? They're typically interest only so you'll have to come up with a way to pay it off either through equity or being able to pay above and beyond the interest only until it's paid off.

@Tyler Salzeider 2nd there was a story that someone told about negotiating on a condo that stuck with me. It was in a high cost area, and it was in 2013 I believe when things were starting to rise again. Basically, it was listed for 80k, and the person telling the story wouldn’t go above 75k for it. Today they estimated it to be worth around 200k. I’m not sure I got all the information correct, but here is the point, don’t lose out on a deal because the price “seems to high” as yourself if it serving your needs. I often tell people around our age when they are getting started that they can pay over asking or “over value” on a house hack because it serves a purpose of getting their feet wet, they still put very little into it, and they’re paying less to own an investment than to rent (assuming they’ve run the numbers and they make sense on a month to month basis).

@Tyler Salzeider so I’m basically just going to steal advice from the podcast for these answers.

1st don’t become an agent just for your investments, you’re going to be competing with people who are professionals and looking at real estate all day, use their skill set to your advantage. You’re on the buyers side so you won’t be normally be paying them. The seller will!

@Jimmy Mooney personally, that sounds like a ton of leverage even if you could pull it off. I agree with the previous statement I think you'll have a tough time financing a new personal home with an old HELOC. That being said I've seen crazier things slide. My discomfort with the deal would be that I am now at 100%leverage on this property and at least 80% on the other. What happens if a larger expense pops up? I would just want to make sure you have a good cash reserve or access to some other form of credit before moving forward as well as having very accurate numbers!

@Matthew Kinsella I’m not sure what the numbers would look like but is there enough equity to just pull cash out to fund the down payment via refinance? You never want to make a decision based on solely the tax implications, but I’m thinking that could be a good way to avoid them, provided the numbers make sense as a rental either long term or short term!

@Stephen Brown @Aidan Birmingham

I can say from experience to take your time! I tried to grow too quick at 19 when I first jumped in and lost a ton and it set me back. I’m back in the game today, but I would be much farther ahead had I just taken it slow!!

Thank you all, I thought it was some next level strategy that only dedicated tenants would apply before seeing it. I was clearly wrong, both from you guys and from not getting a single application. 

I am planning on doing an open house this weekend for people in light of this thread. Thank you all very much! 

I like Derek's idea better, this is why I am not a CPA! sorry! 

Hey all, 

Currently I am advertising for my upper unit, this is the first time I've bought something not already rented. I am collecting emails and sending them an email with the application. Basically, I have been having them apply, run back grounds and credit check before ever walking through the unit. There are 25+ pictures on the ad, it's been less than 48 hours, but I haven't gotten anything back. Is it unreasonable to have someone apply prior to ever having seen the unit in person? I've done this because I don't wanna walk a bunch of people through the upper unit of my home. 

Thanks in advance! 

@Patrick Flanagan I am not a CPA, but from my understanding there is no way to take it over 30 years even if they seller finance it. it still counts in that year of the sale, that being said, long term capital gains is less than ordinary income would be, you can remind her of that. Depending on her tax situation that might be helpful. You could offer a lower purchase price with higher interest on a seller financed deal, this would let her not pay as much in capital gains b/c its a lower sales price but then she can make it up with you paying higher interest.