All Forum Posts by: CJ M.

Keep in mind, you won't make $900/mo in rent. You'll have taxes, insurance, property management, capex, vacancies, etc. that all need backed out. 

@Charlie Anne

3/1 BRRRR in a good school district. Bought sight unseen, paid $26K, put $30K into it, and it appraised at $100K. I still own it. The one thing I wish I knew then was how powerful REI can be towards cashflow and net worth.

@Jordan Meyer

There are good neighborhoods in probably most Midwest markets that give good appreciation, but generally you'll give up a lot of cash flow for those properties. For example, if I can get $1,000 in rent for a $60,000 property (no appreciaition), and only $1,500, for a $150,000 property (w/appreciation), the decision is pretty clear for me, as I invest for cash flow at the moment. As my portfolio grows, and I have excess cash flow, I will then focus on some better neighborhoods for appreciation.

Regarding your question about out of state investors, I've never done that, and honestly don't understand why people subject themselves to that added risk...but if you're going to do it in a Midwest market, at least you know the cost of entry and financial risk is probably lower than somewhere you would find on say the West Coast lol.

O H ....

@Pete Storseth

Gotcha. I'm sorry, didn't read the post carefully enough and see you were onky looking for a HML.

@Pete Storseth

I was trying to find a bank, so that I could pay off a hard money loan

@Pete Storseth

In my experience it's definitely harder to get a loan through a traditional bank these days. Their criteria seems to be a little tougher, and if you meet the criteria, you still have to wait in a long line for processing because of all of the loans they're working through right now. I contacted nearly a dozen lenders this afternoon in regard to a refinance I'm trying to do. I found only one who would consider it...and my business has some solid numbers.

@Jorge Uribe

What would be the interest on the HELOC? What would be the interests with the mortgage? What is your cashflow look like in both of those scenarios? Too many unknown's. For my situation, I have a 10% interest rate on my HELOC, so I look at it more like an emergency fund, or a hard money loan that I would just use for a short period of time.

@Alex Todor

What your friend swears is not necessarily what is best for every one. Personally I would take a 100 year loan if a bank offered it. With a shorter term loan, you're going to have a higher mortgage payment, and less cash flow, which means a lower cash on cash return. It's really just gonna come down to what your comfort level is, and how that helps you move closer to whatever your end goal is. For me, in my market, if a 15 year loan was the only option I had, I would still "try" and work the numbers so I realized a 75-100%+ cash on cash return, or something pretty close to that.

@Kevin Gray

I applied for the loan, because when I spoke with the SBA office originally to get some general info, they said when I was estimating losses, I needed to look at it over the course of a year (since they also request revenue and expenses for the past year). While I may not need the loan now, if this coronavirus stuff continues for 6-12 months, I very well may need it down the road. I'm not gonna wait until then to plan for an emergency (the funds may not even be available then). The way I see it, there's no prepayment penalty, so if the country pulls out of all this soon, and I didn't need the funds, then I can pay back the loan if I wanted. The person I spoke with even recommended that I apply. 

@Greg O'Brien

Interesting. When I spoke with the SBA office, they brought that up to me (i.e. keeping the grant if you don't need the loan). That's the only reason I even know of it. Their exact words to me were, "the grant may be all your business needs during the outbreak, so if you don't need the loan you can deny that, and still take the grant..."