All Forum Posts by: Clayton Silva

 My wife won't let me anymore ;(

 Exactly how I started lol...didn't even know what house hacking was I just did it because I was cheap 

 Happens more than you think, and it could still be a good investment for them, it really depends on the situation.  Conventional financing is about 7.25 - 7.5% at today's rates so an 8% is not out of line for NonQM with or without a BK right now.

I started investing in NC. Accumlated a few good rentals there, then expended into AZ (bad investment) and ended up living in CA. Recently started my own branch of a mortgage bank, but have been effectively self employed since 2020. Our branch and business took off in the last 12 months, and my wife stepped away from a very lucrative corporate career to work full time with me and grow our business. We started investing for the same reason as you and the math changed on us in the last 6 months. The rentals were great at first, but the business grew so fast and has been an infinitely higher ROI on our time, that we actually decided to sell EVERYTHING. We have offloaded 4/6 rentals and are working on getting rid of a 5th one so we can put all that money to work in the business. Ironically, my investments ended up fueling my "9-5" (more like my 24-7 obsession with our business) and we could not be happier. The rentals were great, but ultimately they took a lot of our time, energy and resources away from our golden goose that has allowed us to grow and save at a rate we never thought possible. I say this to say, always keep analyzing and never get attached to the properties because what might seem like a good idea now (and it may be a good idea) might actually change in the future. Best of luck in your endeavors and I hope you reach and exceed every one of your financial goals!

 Check my comment above, many options for bank financing after 12-24 months of BK depending on the category of BK.

In my opinion, the 1% rule was never alive.  It is a really bad metric for determining the value of the investment.  It was always meant to just be a quick rule of thumb to see if the investment was worth digging into further, but was never intended to be the golden rule by which one should invest.  So many investors I see make this mistake and it costs them dearly down the road.  

Why the 1% rule is meaningless:

It does not tell you anything about the property itself, is the property in good condition or does it need significant repairs?  Is the neighborhood, town, submarket, and market appreciating or depreciating?  Is the rental market stagnant or growing?  Who are the tenants?  What do they do for work and what industries is the town dependent on?  What are the tax benefits if any in the area is it in an opportunity zone or anything like that?  What is the highest and best use of the property?  Is cashflow even the correct goal for you and your investing strategy based on your income, tax liability, and other factors?  

The 1% rule, in my opinion, made a lot of lazy investors who were unwilling to do the work to actually learn about what they were investing in and it cost them a lot.  I know there are a lot of people that will disagree with me, so I would implore them to answer any of the questions above based on the 1% rule.  

There is no single rule, no magic get rich quick option, no easy path in real estate investing and a lot of people are learning that the hard way in the current environment.

Just my 10 cents.

Hey Ofir, while your story is painful, you are going to be a lot better off than most because you have learned the harder lessons early in your journey and they will hopefully help you avoid the mistakes in the future and better understand how to navigate the space.  I hope this accelerates your investing journey and if treated as education rather than a set back, it can be a launch pad for a lot of great things going forward.

We do a lot of Non QM loans that only require as little as 12 months - 2 years outside of BK settlement or closure.  It does depend on the type of BK and the number of BK events.  But if you are able to get your credit up above 680 and get past that 2 year mark, there are options out there even for institutional funding still.

@Jeffrey Blackman It depends on the seasoning period and the individual investor guidelines. If she's had the HELOC over 6 or 12 months it can typically be considered rate and term for pricing.

 Ok, so assuming a 210k valuation, the max cashout is going to be between 20-35k (take 75-80% of value for new loan, and subtract current loan balance). Going to be hard to justify a cashout right now with that much cashout to scale.  It is slow rolling to start, but it picks up as you acquire more and more properties and build more and more equity.

What is the current loan balance? 

I've got a couple of potential ideas for you but it depends on your goals and objectives.

Also TYFYS, I'm Army NG myself and I started similarly as you did!  Happy to answer any lending questions you have.