All Forum Posts by: Will Pritchett

Josh and Hattie probably know way more than I do but I was told no locally when asking for a heloc. I was told it was only possible to do a heloc on my residence. I will be very interested if you find someone that will offer this arrangement. Please keep us posted. SWBC in San Antonio will do a cash-out refi while you are still under 4 mtgs. This is the route I was considering to access some equity. Up to 75% of appraised value I believe. Let us know what you find. Good luck!

-Will

Congrats for having six that cash flow! I own two and am nowhere near the 2% rule. Both are slightly above the 1% rule. I could easily get 2% in some of the rougher areas of San Antonio but choose nicer homes in middle class neighborhoods. I find I relate to these tenants and understand them more than the higher or lower end tenants as I was them once. My houses are below the median home price for my city. Also, I would only use these rules as rules of thumb. I could buy a 2% rule house and put 20% down and 10K in repairs and have a poor ROI or CoC return. There are lots of ways to evaluate properties. I am a newbie and am cognizant of the 2% rule and like the 50% rule but use other measures as well. I say congrats on what you have accomplished and keep it up!

I like the idea of buying the next home you live in with the criteria of a good rental and later converting it. Renting an apartment isn't bad if it gets you where you want to be. Kiosaki would say your own home is a liability but the others are assets. Also, I was planning on paying mine down until I was enlightened with the idea that ROI is significantly higher with leverage than without. Think one 100K home paid off versus 5 down payments on similar homes if they cash flow well. Appreciation alone will be five times higher with the latter example. I also doubt I will ever see money this cheap again (interest rates) so why not use that money now and maybe buy with cash when rates are higher. Leverage does carry more risk for that reward so others rightly object to this strategy. Both have merits. Just something to consider. I avoid consumer debt but use debt for houses. Good luck!

What are you doing for your part? Why can't he make the offer? Just trying to clarify. I don't think I would try to profit off my brother's deal unless I was adding value. I may be missing something.

I think 500 a month is a lot! I would wrap my car for that! I think you could do it for half that and have people lining up. Think the Dave Ramsey crowd who are pinching pennies any way they can - 250 would pay many people's entire car payment. What a deal! I think it should be newish cars and some expectation that car be kept clean since it represents your brand. Also a great driving record. Great ideas. I think magnets or custom window decals in white on tinted windows would have a similar effect for much less money. Also, who would be the best target as far as individuals that drive a lot within your target market? I'm thinking auto parts delivery cars etc. lots of short trips back and forth. Taxis sell space in my town on the trunk sometimes. Like a little billboard. May check prices they charge.

Partial to Texas but it is home to me. Are you doing buy and hold? I only have two but they cash flow. Plenty of people succeed here. I would not listen to any one person to decide where to live. I met a guy here with 21 rentals paid for in San Antonio and buying more. He buys off MLS. He would probably say to buy here. I read that there are opportunities in any market. Not sure. My rentals rent fast here. Last one was MLS deal and cash flows nicely. Not sure if LA has state income tax? Texas does not. Not sure of other factors to consider. Good luck wherever you invest.

I would also warn you that the area you are looking - a nicer area of town - won't likely cash flow like a more working class neighborhood may. I kept my first home as a rental and it worked out but I wouldn't buy it again for a rental. It cash flows due to the fact that I have had it a long time and bought it below what I could in today's market. The rent-to-value ratio seems to be higher in these working class areas. I would like to hear if anyone has found that not to be true - especially in our area. Disclaimer: I am a bit of a newbie myself. As an example, my last house is inside 1604 on culebra and cash flows better than my nicer home does. Keep your first home if it will cash flow but if not, consider the duplex type of move Seth mentioned or another home that will cash flow. I don't know of many duplexes in your target area. Also, not sure if you are moving a family with you or are single. If I knew then...I would have done the duplex thing a few times and then bought my "home" but not if I had kids. The only other option I can think of is cash out refi of home for down payment cash but this will likely decrease the chances of it cash flowing. I strongly agree with Seth that you should save up cash. The expenses of the rental were more than I expected. It isn't fun when you have no cushion and something breaks. Look on this site for 50 percent rule to estimate expenses. Just one way to do a rough estimate. PM me if I can help. I am happy to share numbers on min end addresses if you want to Google street view them to see what I am talking about. Good luck!

Read this site a lot! Make a strict budget and stick to it. Save a down payment. Get an inexpensive home or duplex. Maybe rent half and live in half. Stay strict with budget and do it again but keep first home and rent it out. Etc etc. I am pretty new to this And it does take some cash but it is worth it. Being owner occupant will require less cash than buying a rental you don't live in. Invest in educating yourself on this site while you save. You will learn ways to buy below market value and add value to build equity. Good luck.

I would try SWBC as they seem to be investor friendly. I haven't closed a loan with them yet but they were very familiar with investor type loans. PM me if you want the contact info of the person I spoke with - she was very helpful. I believe she said they would loan below 50K. Good luck.

My guy is Juan Nevarez. 210-254-2128. Good prices. If you get a quote from him please let him know I referred you. He is a handyman also for random small jobs. I have been happy with his work on my rentals.