All Forum Posts by: Will Koederitz

Your mortgage company will usually send a coupon sheet you can fill out each month where you can write how much you want to pay extra on principal. This is sent with your monthly bill by mail and you can write one check for the total amount I believe. You can also arrange for this to be entirely automated and withdrawn from your bank account monthly.

If you want to invest more of your time you could possibly work for a contractor or rehabber doing any odd jobs they have. It would be a good way to network, learn rehabbing, and eventually be able to rehab your own properties.

Cory Shannon I agree with Fred Heller , I use my realtor to send me comps for rentals. These may be previous or current and you can eventually get an idea of what the rent amount should be. Be careful, just because something is listed for rent at a certain amount doesn't mean it's going to rent for that amount. It's better to have a history showing that a property rented for a certain amount so you can confidently demand that price.

@Katrina Lane

You need to analyze your personal situation.  Does your current home allow you to live way above your means? Do you want to live below your means to begin investing? How would your current home perform as a rental?

If your current home is more than you need, you could rent it and find a smaller place to live in.  That way your monthly living expenses are cheaper and the tenant in your current home will be building equity for you. 

Or, if you're comfortable having roommates in your home, @Josh Mitchell's suggestion would probably be best financially. 

@Steven G.

Do you know how your current house would perform as a rental? See how much it would cash-flow since there is no debt. You could maybe purchase another house that needs to be renovated, move-in to that one, and rent your current place.  To me, this is a low risk because your current place is already debt-free.  You can also repeat this with a multi-family property.  I know you said the deals aren't that great, but if you get a 4-unit building, you could live in one of the units while renting the others and that may offset your current cost of living (or the money you could be gaining from renting your home).

@Account Closed

I would get financing ready once you know that you're going to buy a property in about a 30 days or so. If the deals are on the MLS, I think you generally need pre-approval but you don't want to just get it now without being ready. The pre-approval is usually good for about 30-45 days. You want to be ready to prevent getting pre-approved multiple times which lowers your credit score. Also, if you have all of your documentation ready, it shouldn't take too long to get pre-approved. You can also ask your lender/loan officer to estimate what you might be allowed to borrow so you can get a head start looking before actually being pre-approved.

@Bill F.

Is this your only rental or do you have more?

How many years left on the mortgage?

I would first look at he return on investment numbers.  They may be low right now, but see what % increase they go to after the unit is paid off. 

if you put 5% down ($7,250) and not cash-flowing, then you have negative ROI. But, I assume your principal and interest payments are roughly $650-700. So once its paid off, your return jumps quite a bit because the debt service was high in your overall expenses. Your new ROI would be over 100%.

Of course this takes time to pay off and isn't a way to snowball rentals to be able to by more.  It depends on if youre looking to buy another right now or hold out for this one to pay off later.

I also agree with having zero car debt but it depends on your goals.  If you want to invest on the side and treat it as a smart alternative to spending your money on other things, then maybe you keep the cars you have.  If you want to expand as quickly as possible, be open to your maximum number of options, then you need to have zero car debt. 

More importantly is the ratio of debt to reserves.  It's ok to be in a sticky situation if you've prepared for it appropriately.  Make sure that when you are in debt you have set aside a conservative amount of reserves.  This will allow you to feel less stressed about the situation because you're preparing for the worst. 

@Sonny Reyes

@James Wise is correct.  You should attack this using a parallel path approach.  While you work on improving your credit, continue to save for down payment/reserves/repairs but also begin to learn about real estate investing.  You will need to know what your goals are before diving in.  These 3 paths should converge and when they do you will be set up correctly to get started.