All Forum Posts by: Matt Crusinberry

@Julie J., What is your goal? Is it to own your own home, and live in this location forever? How old are you, and what stage are you in your life? The reason I ask is in part for you as an investor and you as an individual, however these questions are rhetorical. Most people on here are going toward financial freedom or have already made it and are continuing to build relationships to invest more. You may want to keep that in mind, thus some of the responses are going to be geared toward that end (i.e. the best return on your investment). 

So, I am going to assume you are not planning on making this town home purchase as an investor. I am also going to assume that you just want to have a nice place you call "home." Under those pretenses, I would recommend you put your 85k toward your town home. You will get a better interest rate and lower payments from financing a home vs. HELOC. I would also suggest you look into obtaining a HELOC on your rental if that property can support it. You do not need to have the property all the way paid off to pull out equity. I would suggest you contact a lender and find your rates for both avenues, and run your numbers off of that (to include putting a second lien on your rental). I hope this helps, and let me know if you require more reasoning. Good luck!

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@Shmuel Waldman, My recommendation is to contact a real estate broker, they will know the cap rate for your area. In fact, contact several and try to build those relationships as they will also help you find what you're looking for. I hope this helps and good luck!

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@Steve K., I think you're on the right track. Banks do know that you have a residential property, and that you will be refinancing it into an investment property. You'll still be dealing with a residential lender, but I would recommend you contact a smaller and local bank to work with, as they tend to be a little easier. It will pay in dividends down the road as you begin to grow your business as well (having that relationship). Also, they'll give you the option to keep the loan in house as a portfolio loan. I hope this helps and good luck!

@Inga Fonder, I think you're on the right track, and you'll be able to have an investment property under your belt. I disagree with Thomas, and I believe you intend to make this property a rental as your end state anyway (which meets his obscure measurement as well). People will always be buying and renting homes, they have for a long time... and there's no end in sight. However, if you were to buy a duplex, triplex, or even a quad-plex, you may find it more beneficial. These type of properties also fall under the SFH guidelines, which you're qualified for - food for thought.

You do you!!! If you run the number's as you planned, than all there is left to do is execute. Find your max offer, and make an offer below that. If no one else is interested, I would try to uncover any hidden things that you may not know about. Lock up the seller, send in your home inspector/contractor, and figure out what you don't know. If it's bad, make a new offer based off of that. If you can't find mutual ground, than move on. Good luck!

@Inga Fonder, You did not state the ARV or what you think it's worth. Also, keep in mind where your market is going in the next coming years. I tend to invest conservatively, and I try to stick with the 70% rule or near to it. Without knowing your market (comp's or even if properties are hard to come by) it would be futile for me to guess. It does appear like you have an idea what you're working with, so I wish you the best of luck!

@Lana Lee, I tend to stay away from 1 bed units as well, unless it's too good to turn down. However, I still calculate for vacancy so I don't have to reach into my pocket again for that particular property. 

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@Nicholas Zornek, I apologize, I just saw your response. The vacancy rate is different for different locations (i.e. Philadelphia is around 6-7%). There are several ways to calculate for this expense. Some will just use a month of rent for this number, and others (such as myself and Jason DiClemente) will just take out the percentage associated with the area. I hope this helps answer your question. Thanks

@Paul NA, I assume you mean a return on your investment. I believe it's different for every investor, as their goals and strategies are going to be just as diverse. I personally look for returns in the 20% or higher range, when utilizing my own funds. When we take on investors, we look for returns that are 10% or higher. The BRRRR strategy always give you over 100% of returns, if executed correctly. And each strategy is going to be based off of the amount of risk you're willing to endure, just like any investment, and your return will follow.

You mean 25% of the purchase price? Again I believe this is in direct correlation to your strategy, goals, location, funds you have available, etc. What type of property are you thinking of investing in, commercial or SFH's? Are you trying to buy and hold or flip? What type of deals can you find in your area or are you interested in distance investing? Once you're able to answer these questions, your investment percentage may change, along with your ROI. The point is that there are a ton of ways to invest in real estate, and each is going to give you different returns. I hope this helps and good luck.

@Ervens Oge, There are numerous hard money lenders (HML) on BP. I would suggest you try contacting them. You will need to have some funding though, as they prefer you to have skin in the game. Also, you could try to speak with the current owners and see if they would allow you to do some kind of seller financing. There are other strategies out there, and I don't know your financial situation, but you should plan on showing up with some money. Good luck!

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@Nicholas Zornek, You'll also want to consider vacancy (%) for the area and fixes (%) after your tenant leaves. Good luck!