All Forum Posts by: Joe Bertolino

Hello, I have a question with many answers. Trying to narrow down the right one. My goal is to scale and acquire sfr and/or mfr before interest rates price me out of profitable real estate. I own a home in Sacramento California. I bought it in 2020 at $260k & it has appreciated at least $100k. I'd like to pull out equity to buy positive cash flowing properties OOS. I am 70% through your book. I am thinking about taking a HELOC with an 80% LTV & a promo of 2.99% for the 1st year & 4.99% starting after that. I owe 200k on the house, so the HELOC would be for 88k. I was thinking about buying 2 sub-100k properties OOS with the money, between August & December 2022+$$ for repairs&reserves. The promo lasts from Aug '22- Aug '23 & we pay the variable rate for 1 year & then sell the California house in fall '24 to pay off the HELOC. Right now the California house is rented. The mortgage is $1271 but after vacancy, repairs/maint, capex, I break even every month. What are my best options in your opinions? Any insight you can provide on what you would do would be helpful for my journey.

@Joe Bertolino, so what you are saying is that eventually someone will end up in charge that will run it into the ground.

And of course there are definitely not 40 million people in CA that "want to be there".

Also, CA isn't even a top 10 state in terms of highly educated people. You stated "highest population" because its a big state, but on a percentage basis they aren't one of the most educated and of course that is more meaningful.

Or would you prefer to say that CA has the largest population of uneducated people?!? Since that would be equally as accurate I believe! lmao

@Joe Bertolino, I'm sure 20+ years ago many people felt the same way about investing in Sears. Long term patterns do end. Nothing is forever.

Whether that happens soon or a long time from now who knows, but that pattern will change. So, an investor should be looking at more than that.

@Ramki D., appreciation is ALWAYS in doubt because you can speculate about it but have no control over market appreciation.

Cash-flow is better because you have more control over it AND because you get the money NOW.

Making $2k per year for 20 years is MUCH better than making $40k on appreciation 20 years from now because of the time value of money and also because inflation makes future money worth less than present day money.

Market appreciation looks sexy and sometimes it is when the market is hot but a lot of the time it's eyewash and not as good as it looks like on the surface.

@Joe Bertolino since you are in this area for a very long time, in your opinion if the market corrects, how much % home values will go down in Folsom? I am sure they will follow the market trend. 10 - 15% or more? As you are aware this is a kb home in front of the up coming dignity health campus.

@Joe Bertolino thrilled in a bad or good way?

I live in a suburb of Sacramento where the median list price is around 780k. We currently own a home values at 950k. The loan balance remaining on this house is 70k. We have been thinking about upgrading to a bigger home. The homes we are interested in are priced in the 1.5 to 2M range. Considering the recent increase in the mortgage rates, what would you do if you were in my situation? That is roughly $700 increasing in the payment per month.