All Forum Posts by: Brad Fisher

@David Fernandez thanks for the advise, but I am likely to be assigned overseas next, so using a property manager will be necessary regardless. However, I don’t consider that much different that anyone else who invests out of state.

@Brad Fisher I mean “!”

@Eric Martin What are the challenges of finding and getting a hard money lender, especially if you have not done a deal before (I only have my primary residence, but 800+ credit)? This is an awesome story and inspiring for those of us looking to jump in soon?

Hi All:

As I begin my journey and explore some of the different ways to raise capital for an initial deal, I have run into an interesting question that I would like some advice on from folks that I know are more experienced than me.

I live in northern Virginia, and have a home I have owned for about 5 years.  It is not a forever home; while we do live in it, it is purely as a result of my military assignment here; once I get re-assigned, if I were to keep it, I would look at it as an investment.  Between appreciation and loan payoff, I have what I estimate to be about $90K in equity built up in the property (based on home sales I am seeing in my immediate area).

When I look at renting it out, it looks like will not, or maybe just barely, cash flow:  I can probably rent for $2500 - 2600/month, and mortgage payment is just under $2300/month.  After I figure in maintenance and a PM, that delta is gone.  I AM exploring an offer to re-fi at a lower rate, which could drop the mortgage about $250-300/month.

Now the crux of the question: if I want to get at the equity of the home to use for a down-payment on another investment property, I know there are basically three options: HELOC, cash-out re-fi, or sell. I am currently in a VA loan, so the cash-out re-fi does not look promising given the strict rules for the VA loans regarding accessing equity. If the property doesn't cash flow, would it be better to sell and role those tax-free profits into other properties, perhaps in another market with a lower barrier to entry? Or, given the high property values in the market I''m in, is it better to hold onto the property and rent it out, even if it costs me a bit out of pocket, to continue to gain that appreciation and the knowledge of having that first investment property? Perhaps couple that later option with a re-fi to a lower interest rate (I am at 3.25% now), increase the chances of cash flow, and then maybe use a HELOC?

Sorry this was a bit long-winded.  I look forward to any thoughts you all are willing to provide.