All Forum Posts by: Adam Smith

@Jessica Wise Welcome to BP.  There is a lot of great information on the site.  Prices have increased but I think deals are out there....they are just harder to find. 

Good Luck!

@Muks M.  Thank you for the additional explanation.  I think it just comes down to what your goals are, your investing plan and if you have sufficient funds to feed the townhome.

Another way to look at it is to ask yourself if you didn't own the townhome would you purchase it for a rental? 

I don't know your market but do you have enough equity to sell the townhome and purchase one or two rentals that would cash flow more?

Just something else to consider.

Good Luck!

@Colin Smith Great question! Personally, for my wife and I we pay cash for vehicles and very other thing we purchase except real estate.  For us, we feel better not having consumer debt.  I agree with the numbers @James Maher posted but there is something about having a car payment that makes us cringe.  Just the way we do it....doesn't mean it is for everyone or is even right for that matter.

On a side note, not having any debt (except mortgages) and two good paying jobs has made it easy to qualify for mortgages.  We are ready to purchase two more when we find the right deal.

You have to do  what makes you feel comfortable.

@Dane Kurtz Welcome to BP!  There is a lot of information on the site and in the podcasts and webinars.

Have fun learing and investing!

@Mercedes Ridenhour Welcome to BP!  Make sure to listen to the podcasts and set up keywords so you get notified when posts match your keywords.  While we only have one rental I would suggest learning your market inside and out, learning how to be a landlord, learn about financing.  Do some searches on BP or talk to a local lender but around here you have to put down a minimum of 20% for an investment property.  Look at properties and analyze deals every day....even if the numbers don't work.  This way when you find a deal you will know it.  Learn as much as you can on your focused area/type of investing.

This being said you can only learn so much before you make your first purchase and then the learning really starts....learning by doing!

For us this was the most fun.  Keep focused, analyze deals and learn from people who are where you want to be.  While every situation/deal is different BP is great for learning from other peoples "lessons" and minimizing your mistakes.

Good Luck!

@Muks M.  Personally, we would not rent a negative cash flow property which is essentially what is explained.  Why not find a property that cash flows monthly and the tenants are paying off the mortgage.  Granted we only have one rental but we cash flow $700/mth plus the tenants are paying $750/mth on the principle. 

We saved the monthly cash flow for CapEx, vacancy, etc. There are a lot of expenses other than the mortgage in a rental. Water heaters, furnaces, roofs. appliances, flooring, etc. all have a useful life and will need to be replaced. If you are feeding the rental every month and you have to repair/replace items you may be feeding the rental a lot more than you think.

Just my two cents....

Please note we do not know your personal situation or your local market.

Congrats!!! You will learn so much on your first rental! I know we did! Researching is fun but there is nothing like learning from "doing".

Congrats! We have similar numbers on our first rental (although SFR). Once you make the leap you can't wait for the next deal!!

@Eli Arkush We got our HELOC through Summit Bank and Trust in Thornton, Colorado. We also have our rental mortgage with Brad Lyons there. He is wonderful to work with. I think they are a local bank and not in Florida though. We compared banks and credit unions and found Summit had HELOC's that I think were 90% LTV (if I remember right) on our personal home. The loan does not have a balloon, which most of the other banks did. They do review the loan but we make payment a lot larger than the minimum payment (interest only) so it should not be an issue.

We found that every bank or credit union has their own HELOC product so it helps to shop around.

Good Luck!

@Linda Weygant, @Brandon Hall  Thanks for the information.  I have tried to get to Erie for the meetup but work or something else always seems to get in the way.  I will put January's meeting on my calendar.