All Forum Posts by: Bryan Stengel

Hi Rob, welcome to the Bigger Pockets community! I am from Long Island too. Leveraging you primary residence in order to procure financing for the a rental property will certainly give you the opportunity to get the best rate. I totally understand you taking the HELOC route especially if you don't want to touch the current mortgage rate on your primary residence. I am more than happy to connect with you and share with you my experience as an investor so far. Feel free to reach out.

Hi Jennifer, welcome to the Bigger Pockets Community!  You will definitely learn a lot just from participating in these forums.  I live on Long Island and currently invest out of state.  I'd be happy share with you my experience and where I am currently looking.

Hi Kaleb, I live in New York as well.  I totally understand and acknowledge the idea of investing where you currently live.  However, I am not a fan of the tenant laws in New York.  You may be fortunate enough not to have a bad tenant.  With that being said, I personally know several people who've had tenants that stop paying their rent and try to hang around for as long as possible.  It is unfortunate, but it does happen.  My advice is whatever area you do decide to invest in look up the tenant laws.  I invest in Scranton where tenants know that if they do not pay their rent for one month.  We could essentially get them off the property in about two months.  It's comforting knowing that you have some sort of protection there.  What I would suggest is also consider investing in an area that you could drive to as well.  I did that for myself again knowing that I could go over to my property if I wanted to.  All the suggestions above are great and I'm sharing my personal opinion.  

@Beau Alesi wow that's incredible! It might make the most sense to just sell your primary residence and use it as 40% to 50% down payment on your future home. I'd keep the rental and by no means refinance it to take cash out. If you're interested in still taking cash out of the rental to put toward the down payment, you may consider a HELOC then. It's debt you'd still have to pay back, but at least you will not touch one of those two amazing interest rates. In my opinion though, I would not touch your rental. It seems as though it'll be paid off before you know it. You are still going to get the best rate possible with your significant down payment and with good credit I'm assuming.

Hi Beau, it sounds as though you guys are looking in a desired neighborhood as well.  Considering that, you are likely going to see appreciation year over year, which essentially will be additional equity you'd capture just by simply living in the home.  It may even be higher than 5% depending on the area.  Some areas on Long Island tend to appreciate even more.  That is not exaggerating.  Personally, my primary residence has appreciated around 6% in market value and I live in Levittown.  Additionally, you may be planning on living in this future home for some time.  We are definitely likely going to see a drop in interest rates, which means you could always refinance in the future too to further reduce your monthly payments. 

Hi Makani, I believe that staying positive is great cash flow in itself.  I will also emphasize the importance of keeping at least 5% of your gross rent income and allocate it toward emergency situations each month.  I'd deduct this before accounting for your total cash flow.  I am still a relatively new investor and wish somebody told me this when I first started.  Appliances do break and you need to be ready take care of the bill when that does come around.  Overall, the tax benefits and appreciation alone keep me interested in staying with it more than the cash flow itself. 

Hi James, I think it is about time we stop pointing the figure at who is at fault.  It is very easy to look from afar and make accusations without not being there to experience the reality of the situation.  It might be a good time to come together instead of passively displaying your political views on a platform dedicated to real estate investing.  If this post was about how we can help these poor people who have lost their homes, then you would garner more attention that goes to a cause.  That's making a difference.  It seems like you are pretty successful.  I hope you are trying to put your resources to help these people.  Just my honest opinion after looking at this.

Hi Daniel, I would definitely keep your options open in terms of finding the right accountant that could be of great assistance.  You mentioned W-2 income as part of a way to save on taxes.  As far as I know, you can deduct off your W-2 income if you are a real estate professional.  This doesn't necessarily mean just an investor, but somebody who active works in the space and puts in at least 700 hours of work into it per year.  It should make majority of what you do as far as work goes.  However, there are still plenty of tax benefits when it comes the income you generate from your multi-family property that you can deduct from.  In addition to interest and repairs, you can deduct off a 27 year depreciation on the home.  Your accountant should be able to factor that into your total cost.  Congratulations on the purchase!

Hi Bryce, I think the age of the home will never affect the cash flow or even how much it really appreciates.  We live in Levittown and all of these homes were built in 1948.  Surprisingly, these homes that once sold for $7,000 are now selling for close to $1,000,000 and it doesn't seem as though the rate of appreciations is decreasing anytime soon.  If the the demand is there, the homes are likely to still appreciate over time.  Adjusted for inflation, the prices of homes in a desirable location appreciate more than average wages.  As mentioned before too, newer construction tends to sell at a premium too.  Older homes may need updated style, but as long as your rough-ins are intact, everything should be fine. 

Hi Allen, I have thought about this myself extensively over the years. I always ask the question, why not do both? The stock market can be volatile in terms of percent returns year over year. We've been fortunate that it has been outperforming the expected 7% year over year. I follow J.L. Collins who favors VTSAX stock, which I particularly enjoy. I would suggest if you had not already to put some of your money into a ROTH IRA (maximum is $7,000 per individual) and invest in VTSAX. It is Vanguards total stock market index and consistently outperforms most ETF funds year over year. Then, put the rest to work in Real Estate. There are so many benefits. Depending on the market you invest in, you may have enough to go all cash on the first deal and refinance to put money in the second deal. You will also have tax benefits as well. I believe it is 27 years of depreciation that you hedge against any cash flow you received. Then, you have the long-term appreciation. Your success in this space will also translate to different type of business relationships. Investing could take your career in new directions. It has for myself and I've appreciate the new friendships that I formed after starting.