All Forum Posts by: Daniel Hsieh

Originally posted by @Anthony Hornbeck:

What would you do in this scenario?

Investment Property with equity of approximately $75k.

Student Loans of approximately $50k   (Overall Effective Interest Rate 5.25%)

Would you sell the property to pay off the loans, or keep the property?

Extra info: The property is self managed in this scenario, but does bring in $700/month cashflow after all expenses, capex & debt service.

Take the rent income and pay off the student loan. Remember after you pay off the debt service which part of it is paying down debt so your equity build up over time too. When you sell your property, you also lose the income producing property. Like other suggests, if you have equity in the house, geting HELOC at low interests rates to consolidate your debt is a good way to go. If you want to sell the property to pay off the student loan, hope you can get the extra cash left to buy another property.

I wrote white a bit about HELOC on my blog. Check it out below.

Main Street Journal

Originally posted by @Simmy Ahluwalia:

Great post Daniel!  I too arrange EB-5 financing for projects.  We have a $48M Marriott in Atlanta that is seeking up to $16M in EB-5.  My challenge is sourcing the investors at this point....

 Call up immigration lawyer! Let's how my wife's cousin found it. To be frank, the new wealth created in China should be able to fund your deal. Go to China's town and call up immigration lawyer there. One thing about Chinese. They care about status and they will spend the money to get the right status. When they stay here with right immigration status, most Chinese will lose sleep. They are very conservative and law-abiding. 

By definition, EB5 is “created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth.”

So why am I talking about EB5? There are many capital extensive projects that require equity investors. My wife’s cousin’s family is looking into attaining Green Card, and EB5 project provides a way for them to obtain just that. Normally, projects that are EB5 eligible will have to generate certain numbers of job created per the investment, along with other key criteria. One way for EB5 eligible project to get equity funding is by reaching out to immigration lawyers to see if their affluent clients will invest in the project in exchange for their immigration status, in this case, Green Card. The particular project I saw requires 26 EB5 investors with $500k in the project that is worth $48m. Doing the quick math and you will see that that is more than 25% coming from the EB5 investors. The beauty/ugly of the deal is then that because the project sponsor know that EB5 investors are really looking to obtain Green Card which they otherwise can’t get, EB5 investors are promised a lower return. In this Houston apartment building project I was shown, the EB5 investors are getting 4% return, and they are perfectly fine with it. It is a win-win situation for both project sponsor and the EB5 investors. Project sponsors are getting someone who are willing to invest but require lower than usual return. EB5 investors deploy their capital into sound real estate project. Although they are earning low return, they got their immigration status that could benefit them and their immediate family. I wasn’t shown how the cash will be split once the project got refinanced though.

My take away, immigration lawyers are another resource to find capital project to invest in. Imagine you are not EB5 investors but rather the direct investors, what kind of return do you get when most investors only require 4% return. You do the math.

I document my real estate investment journey here. Hope whoever reads it can benefit from what I have learned and experienced. 

Main Street Journal

Originally posted by @Teage Staunton:

Most of the traditional bank, credit union and portfolio lender you talk to will require you put down 20-25%, some even 30-40% down, as your skin in the game. I have talked to quite a few financial institutions in the past 3 weeks to get my finance lined up. Traditional bank will have stricter lending requirement andif you don’t already have a solid financial history for them to see, you will have to be “creative”. Portfolio lender may be a little lenient in some of the requirements but most of them will still require 25% down. Coming up with money is always hard at first, so there are a few suggestion.

• 1.Try to see if you can qualify for personal line of credit from banks or credit union. Make sure you calculate so that you don’t go over 43% of debt to income

• 2.Try home equity line of credit. Same thing, make sure after you borrow, you don’t go over 43% debt to income.

• 3.See if seller financing is available

• 4.Lease option so you don’t have to come up with down payment. Lease it back out right away.

• 5.Save your 25% down payment by continuing working or other real estate related work, like wholesaling.

• 6.Partner with someone else who has the cash. Split the profit 50/50 and you remain as person in charge.

• 7.There are other ways to find properties for cheap. Like obtaining tax lien list, pre-foreclosure list and contact these people to see if they are willing to sign the contract with you. Get them under contract then flip them.

Most importantly, don’t stop thinking. Keep asking how you can afford it and you will find the way.

I have documented my real estate journey in my blog and right now they are mostly pertained to getting finance lined up. Hope you may benefit from what I have learnt.Main Street Journal

Welcome to BP. I am much like you and am in it to make it happen. I also live in Houston so it will be nice to meet up in person sometime in the near future. I am documenting my real estate journey in my blog and I hope everyone who reads it can benefit from what I have gone through. Best of luck. 

Main Street Journal

Conrad. I posted quite a few posts about HELOC here in Bp and my blog. Basically the bank will take 80% of the value minus the loan balance. By my calculation, u get about 15k from the bank for HELOC on your primary home. U may need to put down 25% percent. Going with the convention financing, you will need to get your debt to income ratio below 43%. If you can get HELOC and perhaps personal line of credit (unsecured) plus some personal saving and still manage to have debt to income under 43%, you just got your self some creative financing. Given that the property is a good deal and rental income or flip make sense to you after all the hassle you had to go through. Msj.blogspot.com

I bet most people don't know about this. Pentagon CU is pretty awesome. I am a member and plan to talk to them next week about HELOC on my rental property.

Pentagon CU HELOC

After reading so many posts, I decided that I will reboot my blog and document what I am doing to purchase my first apartment. Currently I am getting my finance in line before actively looking at apartment. If you are just starting out, you can take the journey with me and see what kind of mistakes and hardship I am going through. If you are a seasoned investors, I appreciate your comments and guidance. 

Main Street Journal

Originally posted by @Aly W.:

I used TD Bank for 4 Helocs on investment properties, and said it was for home improvement and purchase of a 2nd home (vacation property). After we hit our limit with TD Bank, it took over a year to find another lender, which was a credit union in the state where our rentals are. Both lenders offered about 75% LTV. We also have a Heloc on our primary residence, for about the same amount through another credit union.

 Thanks. I may give them a try. 

Originally posted by @Oliver Trojahn:

Small local banks can typically provide 100% HELOC's on primary residences. I have two.

I use a commercial lender for 80% loan to value for business line of credit on rental properties.  This is obtained from portfolio lenders.

Also, you should tell them you plan to pay off debt with your HELOC not use for a downpayment.

 I will definitely try that. Calling up all the small banks I can find.