All Forum Posts by: Chris DeMello

@Account Closed Sorry yes, he's paying the mortgage not rent, and he did probate the property. What is a wrap? Thank you for the great advice! 

Aloha BP. Seeking some advice.. I'm trying to get creative with a seller on a deal. It's a 2/1 + a full unpermitted bath in garage. Owner inherited the home from his brother that passed away. He wants $260k cash. He has it on MLS for $299k. Comps are around $320k-$330 and house needs $30k for rehab. I know his situation because I got introduced to him by a mutual friend. He owes (according to him) $215k and is paying $2k a month rent on it. He expressed he really wants to sell fast to move to Vegas & he's tired of paying the rent.

I am meeting with him tomorrow to go over numbers. I was thinking of proposing the idea of partnering. Maybe paying him a down of $40k and going in on title as tenants in common. I'll pay mortgage payments till house sells. I'll rehab home, sell and pay him the balance of $260k - $40k - $8k (rent 4 mo) = $212k. If I go regular route and buy using private money there's no money to be made if he doesn't budge on price. This way we both get what we want!  If not $240k cash should be my all in number. 

That make any sense? or bad idea? On my 10th cup of coffee trying to figure out a way to make this work :) Any ideas or advice will be greatly appreciated! 

Thank you!! 

See what we gotta pay for in Hawaii?? lol

@Ronald Erwin That's a great question. I too, own two homes in Hawaii, and we're buying our 3rd in Las Vegas soon. We utilize a HELOC smartly as our strategy. This allows us to pay down our house a lot quicker and have extra funds to put down on the next house. Helps to qualify when you have a bigger down. Now we have 20% down for 3rd house. HELOC's can be tricky if you don't know how to utilize it to your benefit tho. We use and teach different innovative banking strategies to get ahead a lot quicker.

Portfolio loans (asset-based lending) can be another option if you can't qualify for a traditional loan. Need 20% down, property must cash flow at least $1, and rates are a little higher. Been trying to get info on this lately to also see what other options I have to keep buying rentals in the future. 

I love that you project out in to your future! Thats a great plan, and i'm sure you'll do fine any route you choose. I have one suggestion.. Financial Education! I can show you your specific numbers in a 3 month financial projection utilizing standard banking leverage that will blow your mind! Depending on your cash flow I can show you how to save $10k in 4-6 months by just changing the way you bank. 

My wife and I absolutely love teaching personal banking strategies. Especially when they're driven to get ahead. Here's a quick video to see what we do: 101financial.com/peace

Feel free to call, message or email me any questions.  Great job bro! Wish my kids were just as driven as you!

@Brian H. My wife and I had that same debate! “Should we take out her IRA and use It toward debt”. Having a financial plan to “purpose” our money was the best decision we made. Gotta keep asking yourself WHY? Pay off debt then what? Invest? Who‘s to say 3yrs from now you are not right back where you we’re in debt! What‘s your end game? What’s your goals as a couple? Things you guys should discuss in depth. That’s why financial education is so important! Understanding how money and banks work so you can make moves, and leverage back at them, so you can get ahead quicker! My wife and I learned alot about banks, credit cards and just how to leverage our Income to benefit us more than the banks. Here’s a 5 minute video to see what we do: 101Financial.com/peace Happy to answer any questions you may have! 🤙🏽

OPM is great if you have a plan. We leverage banks LOC's to grow our money a lot quicker! We refer to it as a "debt checking" account in the 101 Financial world. Let me know if you want some free information on how it can be very beneficial to you.

Be a private money lender? Got a friend that pays 12% APR per month on your investment. Flips 20+ houses a year. Easy free money.

@Todd Blank Velocity definitely has the right idea. I love my HELOC, and got to make some big moves with this strategy. I can take that one step further and show you how we do it at 101 Financial. Leveraging your money and utilizing innovative banking strategies is such a great way to get ahead a lot quicker then conventional banking.

101financial.com/peace is a quick video giving you the gist of what we do. 

@Amul S. I had a very similar situation on on my property. I put a HELOC on my first home and used funds from line to purchase my second home. Key thing is I did my HELOC in the first position. Almost every bank never offers it, but it’s available. You see, getting a HELOC in second position keeps your mortgage in place, but now you’re gonna have another monthly payment when you’re already stretched thin. The beauty of 1st position is you can buy out your mortgage and still use the difference for a down payment. Example: HELOC $400k Mortgage $327k. Payoff mortgage w/ HELOC. $327k balance $73k available. HELOC interest only payment, depending on interest rate is around $300-$600 month. Rates usally higher In maInland than Hawai’i. Guessing your mortgage is around $1,500-1,800 a month? The biggest thing tho is using this HELOC smartly. If you just pay the interest, you‘ll never pay down the balance. That’s where financial education is very very important! Understanding and having a plan with your personal finances is a must before you take this risk. I talk about these 1st position HELOC’s only because I’ve learned how to treat these lines like a checking account so we can pay it down rapidly, and still get what we want.. just quicker! Let me know If you wanna learn more. ALOHA!

@Diana Muresan I say "Hawaii" because we have more favorable interest rates for HELOCs than the mainland. People are not interested because they don't understand how it works. As a society, we are trained to OBEY and follow the banks’ rules/advice (like they have our best interest at heart). We are taught to play it safe by sticking with fixed rates. We are taught to look for lowest interest rate possible and comfortable monthly payment. Just because it’s comfortable doesn’t make it right.

You, personally, may not choose to offer HELOCs because of the vulnerable position it leaves the bank/you. At the end of the day, banks are businesses and are in the business of making money. Simple interest revolving lines puts the bank at a higher risk, being they have no control over how much their customer chooses to use or pay into the line. Conventional fixed mortgages offer security for the banks being they are able to front load the interest and know exactly, down to the penny, how much they’ll make off that particular loan. HELOCs, when strategized properly, simply give the consumer the flexibility to decrease the amount of interest and time on a loan.

• Yes, your house is used as collateral, just like a mortgage!

• Yes, I personally prefer to SAVE on the amount of interest I payout on a home than take a tax deduction come year end that doesn’t payout more than what I could have SAVED simply by restructuring.

That's why financial education is so important! HELOCs, PLOCs and credit cards have a bad stigma due to lack of understanding. When used SMARTLY, these tools are excellent leveraging power that benefits us as consumers to significantly reduce the two biggest obstacles we all face…TIME and INTEREST.

I'm not saying HELOC'S are better than a mortgage. I'm just saying look at the numbers, what is your goal/objective, and the bigger picture of it all.

I’m on BP to learn and grow as an investor. I'm not trying to offend you or your job. I sincerely would like to know why this way isn’t more efficient than going the traditional/conventional way to you?

Mahalo,