All Forum Posts by: Cameron McCown

There are, and truly there's not a way that's wrong- there's just a way that works for you.

House prices are lower today than they will likely be at an average point in the future, and getting into action is the key to success in this industry.  So you can wait until everything's "right" (it's a myth), perfect, no debt, whatever.

Or you can get into action.  Put the money down, and use the cash flow from the new property + your current income to pay off the credit cards even more aggressively.  You're essentially buying $200/month (or whatever the net cash flow is), to get yourself out of debt instead of getting out of debt with the cash flow you have.

Be smart.  Make the investment make sense.  But invest.  Or don't, and wait until everything is just right.  There's no wrong way to do it, just a way that produces more money at the end of life and a way that produces less.

@Ronald Bredemeier I was in the Army from 2003-2011 and mobilized twice during that time. The VA loan is one of the best for house hacking! On a 1-4 unit, you can finance 100% of the lesser of sales price or VA Reasonable Value. In Hawaii, the max loan amount is $726,525. This looks like it could be a good deal for you for sure.

Good job,@Tyler White!  The first one is usually the scariest, and it gives access to all others.

Congrats on being on your way to financial freedom.  House hacking is a great idea for the first one.

Take care!

It makes sense to pay your credit cards off, so you pay as little interest as possible.  But in the mean time, you're not making money with a new investment because you don't have the down payment due to paying off the credit cards.  That wealth lost over time = more than the interest you paid on the credit cards.

@Jeremy Torres, You don't need to pay the car off.  When I preapprove someone for a purchase, I look at the minimum payment required on each liability, and that goes into their debt-to-income ratio.  If you owed 5,000 on the car, but the payment was 350/month, or you owed 20,000 and the payment was 350/month, all I'm looking at is the 350/month.

Use the money for your down payment instead.  Cash flow the house, and pay down/off your car more aggressively.  Now, you've got an asset instead of a liability that's appreciating in value as and reducing debt, and you started now instead of 6 months from now, thus you're further ahead, and the price of the asset is lower now that it would be then.

@Zachary Zinn, Keep your cash for down payment. I'm a lender, and I can tell you- The only thing that counts against you in purchase qualification is that minimum $350/month payment. However, more money down = a better loan, lower rate, lower PMI, better everything.

I preapprove purchasers for a national bank, and I can tell you, however tempting it is to get out of 16% debt- Put more down.  Make the minimum payments until you do.  Cash flow and/or pay the cards off after you purchase.

You will get a better deal, bigger house, better tenants, and we'll have reserves, which I look for in the preapproval process.

Take care.

@Michael Monfre, I'm also in St. Louis.  Let's get together.  @Alejandro Ortiz, St. Louis is a great area to invest in, with equidistance to Chicago, Memphis, Indianapolis, Nashville, Kansas City.  Great values on houses still here and no shortage of renters.  Take care.

@Jason Heard, get a HELOC (Home Equity Line of Credit) on your primary, and either use that for down payment on a new multi-family that you move into, or buy that building outright with it (you're financing yourself). Or pay HELOC cash for your new one, stay in your current, and rent out all units for max cash flow.

I think there are some tax effects to a HELOC vs. a traditional mortgage, in that HELOC interest may not be tax deductible. So another idea would be to do a cash-out refinance on your primary (there would be cost, but you have the tax benefits), and use that money to either buy a new MFR outright or move in, get a loan, and house hack it while renting out your current primary.

You can do a line of credit up to about 90% of the value or a cash-out to 85% of the value, unless it's a VA loan, in which case it's 100% of the value.

Trevor and Anthony, I'm in St. Louis!  I do mostly residential financing and some investing.  I love duplex/triplex buy-and holds.  Good to have some other Missouri people here!

@Ben Harhager Do you have 2 years work history in ANY industry?  How many of those are tied to the industry in which you already work?  How long are the gaps of employment?