All Forum Posts by: Chris Lounsbury

Thank you @Chris Shipman.  I guess my main question is does that seem like a reasonable refinancing option?  This is my first time dealing with refinancing and so although paying 200k over the life of the loan seems outrageous to me, maybe that is only because I have never done it before?  I, like most people, was raised with debt=bad, and although I now know that is not always the case, especially when you have debt working for you, sometimes I still get caught up in that idea.

As far as the equity, I would love to scale my business, and I definitely need capital to find more deals, so I was leaning towards pulling out more money, just again, it scares me seeing total paid back is more like 275k and interest rate is 7.9 instead of 7.4, so I guess I have to weigh my options on whether that extra 30k upfront is worth it in the long term.  

Also, is it smarter to take out 60% LTV and pay off all expenses and then have about 20k to reinvest in another project, or 75% LTV, have a smaller monthly cash flow, but have 50K to reinvest in the next project?

Hi BP world. I need some advice on a deal that my family did using the BRRR method. We bought a duplex for 20k, put 55k into it and it is now renting for 1650/month. We weren't able to get a conventional loan when we bought the property and so the 75k was out of pocket. We want to refinance this deal now and pull our money out of it. It will appraise for around 130k-140k. We reached out to a lender and he gave us some options. We can take anywhere from 60-75% LTV at a 7.4-8.2% interest rate amortized over 30 years, (with 2-4 points thrown in there somewhere). Our numbers still fall within the 2% rule of cash flow per month, but as we were looking over the total paid back over the life of the loan we noticed that we would be paying back over 200k. I am wondering if this is normal, paying 100% in interest payments? That seems really high to me. Does anyone have any suggestions or know of a lender with more reasonable terms? Am i missing something in my calculations? This is my first time dealing with refinancing, or loans at all for that matter. Thank you in advance for any and all advice.

@Brandon Hall I completely understand your point and I do not disagree that finding a job with a larger salary of course will make it easier to have the money for that first deal.  I guess I didn't describe my dilemma well enough.  1) I don't want to end up working somewhere that I do not enjoy.  I want to wake up everyday that I have work and look forward to that day.  Knowing my own personality, I don't think I would look forward to a desk job.  2) I am afraid that if I do get a job making a decent amount of money, I may fall into that same trap that so many people fall into.  They become complacent and stick with the job security instead of finding ways to do the things that they love.  I know this does not happen to everyone, and I am not bashing corporate America, I just feel as though it is not suited for me.  I do become complacent when things are going ok, so I like the struggle of chasing the dream, it keeps me motivated and on track I guess.   But at the same time, I really feel as though the money would make my dreams of real estate investing more achievable, and so its like a catch-22.  I greatly appreciate your input, and I am actually going to take your advice into consideration and see if there is something that would interest me enough in order to take those steps into real estate.

Hey everyone, just wanted to introduce myself to the BP world with a quick about me and what my plans are.  I was born and raised in Orange County, NY, but am planning on making the move to Southern California in the summer.  (I know that isn't the ideal place to be for investing right now, but I am definitely a dreamer and California has been a dream of mine since the first time I ever visited.)  I recently graduated college, but during my time there it became increasingly clear that I was uninterested in following the beaten path of entering into corporate America and working for the next 40 years.  After gaining experience in multiple endeavors, I realized that my passion had been staring me in the face my entire life.  Since I was about 12 years old, my parents and I slowly tore down and rebuilt our colonial home into a very beautiful new colonial style home.  We did most of the tear down and rebuild ourselves, and I learned a lot about designing and building.  Thinking back on this, I began to look into real estate investing with the idea of getting into house flipping, but after exploring the different niches, I think I'm even more interested in owning rental properties.

My main problem is my desire to get started investing now, but not having the funds to do so.  Currently I am a server/bartender at a restaurant and bring home around 2000 a month.  I actually dont mind working in this field for now, mingling with customers and putting smiles on peoples faces each day, but the money definitely isn't great. I know that I could apply to jobs that would pay me greater and make it easier to begin investing, but at the same time I have told myself countless times that getting a "real job" may slow down my true dreams, and I cant imagine finding a salary job that I would enjoy doing.  I don't want it to distract from my motivation to make money in a different way than the majority of people that have told me to take the "safe route" and find a nice paying job. 

With that being said, I am at a loss of what to do next. I am humbly seeking any advice or encouragement from everyone on this site. I would greatly appreciate any comments on this thread and hope to connect with some like-minded people that are willing to share anything they believe will help my journey into the real estate investment market. Thanks to all who took the time to even read this far, and good luck to everyone on this site in their own endeavors in REI.