Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.Make sure you understand the Class of properties you are looking at and the corresponding results to expect.The City of Detroit has 183 Neighborhoods we’ve analyzed.PM us if you’d like to discuss this logical approach in greater detail!

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

There is no debt service coverage when a property is vacant/distressed and in need of rehab to produce a rental income situation.

Not having to work in this example means having the 15 rentals producing enough cash flow to pay all their costs, including all 14 old mortgages and the 15th (new) mortgage that is refinanced each year.   

As a result I ended up with a 40% + annualized ROI.Third example : my partner and I owned a retail center onto which we had placed a $650,000 bank loan at 4% fixed for 15 years.  

It would also be more accurate if you are keeping same PM as different managers can have much different results.

As a result, I decided to sell my house.

Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.Make sure you understand the Class of properties you are looking at and the corresponding results to expect.The City of Detroit has 183 Neighborhoods we’ve analyzed.PM us if you’d like to discuss this logical approach in greater detail!

now that we know this companies name I suspect some of the SC agents will turn this company in and ask how they can do it while others cant/wont.Jay, do you see all of this regulation as cleaning up the swamp of fly by night wannabes  and resulting in greater deal opportunity for those with the capital, knowledge and experience to comply and profit?  

@Landon Lehmann many investors borrow against their primary residence equity to invest.Getting a HELOC can also be the path of least resistance and cheapest.There is risk though, that if you investment results in a loss or lawsuit that you could lose some or all of that money and more (lawsuit).Getting more insurance is typically easier than setting up an LLC and meeting all the requirements to separate your business from your personal assets.What are you doing to source potential flip properties?