All Forum Posts by: Clayton Silva

Awesome deal!

This is largely going to depend on the state you are investing in.  Some states have laws the prevent you from evicting them unless they break a lease and then they have rent control on top of that which caps the rental income you can charge each year.  I generally invest in states that do not have either of these things.  I can buy a property with a tenant, wait for their lease to expire, not renew their lease and put it on the market for market rent if it came to that.

This is a great question Quota!  Technically no one is going to be able to answer this perfectly without first understanding a few things:

1) Your goals both short and long term financially

2) Your debt tolerance (some people are ok with debt and some are not)

3) The markets you are looking in

4) What your income and earning potential look like

If you didn't want to answer those publicly, just shoot me a DM if you'd like and I can try to help in any way I can!

If you are just asking what other people would do, I think I would likely buy a multi-family home to live in and use the funds for the down payment on that, then I would use the remainder to invest in more properties!

Great question Christen!  As someone who gets this question about 15x a day I feel especially qualified to answer haha!  HELOCs on rentals basically dried up.  The alternative is a HELOAN on an investment property, but that wouldn't make much sense in your case if the property is paid off.  HELOANs really only make sense when you have a high balance, low interest rate 1st position mortgage.  There are still other ways to tap into that equity.  What is stopping you from a refinance if you don't mind my asking?

Hey Stephanie, I was curious what that was so I just googled it.  The reviews are not great and it looks like they blow up people's inboxes.  What is it that this company is supposed to do?

The househack is probably the safest way to start.  You are either going to have to pay rent or pay a mortgage anyway to live somewhere so it's almost a sunk cost!  It's the easiest way to get started and reduce your living expenditure.  

My pleasure!  Then you would qualify for the cash out the same way.  Only thing you might run into is seasoning.  How long ago did you purchase the property? 

Your equity would be as follows:

Scenario 1) 75% cash out = New loan of 645,000 - HML of 644,000 leaves you with 215,000 in equity in the deal and 1k in your hand.

Scenario 2) 80% cash out = New loan of 688,000 - HML of 644,000 leaves you with 172,000 in equity in the deal and 44k in your hand.

(Both of these assume no closing costs etc for easy math).

This bums me out because I was a huge fan of his episode. I have listened to it probably 20 times.

Quote from @Jay Hinrichs:

seems to me this is just a math problem and since you have been so successful to date I dont see why you would come to the internet for advice you should be giving advice on how you were able to do so well so far.

direct ownership has least risk and most control.. 

syndication your not in control .. so there is that.        

I would second this.  The control aspect of the syndication would have me most nervous if I was planning on living on the cash flow.  I would not want to constantly have to reevaluate a syndication deal every 5 years or so if they sell. At the end of the day, you should do whichever one pulls at your investor heart the most frankly.  I don't think either is a bad option, but control is super important especially in RE for tax purposes when it comes time to timing a sale.

Typically, for most of our clients we work with in similar situations, your lender will ask for a letter of explanation as to why you are moving.  What they want to see is that there is a reasonable expectation that you are going to live in the home for at least a year so things like (closer to family, or closer to family, or bigger home, or more space) will suffice and you won't have to change over your DL.  You could get in hot water down the road if you went to buy another one and the OR property was not your mailing address or something that indicated to the next lender that you did not live in the primary for at least a year.  That is typically where people get tripped up which is brokerages like ours help people with multiple transactions and structuring their investments over the next few transactions to help avoid any issues like this.  Hope this helps!