All Forum Posts by: David C.

@Eddie Shumulinskiy if you could payoff you mortgage sooner, wouldn't that accelerate your path to FI?

@Eddie Shumulinskiy this is a good point. My thoughts are very similar to yours. That's why I struggling with it. The one aspect that Im challenged with is that when thinking about financial freedom, my mortgage is a big part of that hurdle. So if I didn't have a mortgage then financial freedom happens a lot sooner.

Does your financial freedom account for your mortgage as well?

@Jeff Copeland in your experience, do you see investors take risks they wouldn't ordinarily take by having the HELOC? I ask because it is almost like having cash ready at a very low cost and the idea of buying something in "cash" and getting a good deal can seem very enticing.

Just curious if people subconsciously take less caution when using the HELOC vs qualifying for a loan.

I could see utilize the HELOC for the rehab and keeping the LTV low on my primary as a result.

@Braden C. Exactly. I think it's that piece of mind that you really can't quantify. That's where I struggle being a numbers guy, I want ever $1 to be maximized. Getting rid of a mortgage is just as you said, comforting.

@Jeff Copeland I have considered this. One of the reasons I'm not sure if I would do it is I like mitigating my risk. I'm not sure I want to leverage my personal residence for investing. Again, I'm not against it, just weighing options & the risks.

If I can do a HELOC on a second home or vacation property, I would prefer to go that route with my next purchase. Do banks provide HELOCs for these?

Hey BP!

I am in a dilemma and looking forward to hearing your feedback. I am entertaining the thought of selling or cash-out refinancing some of my rental properties. Initially, my plan was to reinvest the proceeds into better properties or multifamily. Now, I'm considering the idea of paying off my primary residence (about 75% of it) which I just moved into this year.

I'm considering selling because the properties I purchased in 2019 are selling for double what I paid for them and the difference with the refinance is about $60,000 less. Because these are townhomes, I'm not sure the prices will return to this level once the market adjust.

I know paying off the primary might not be the best in terms of ROI, but in terms of financial freedom paying off my primary is a large part of that goal.

I look forward to hearing your thoughts. Let me know any additional information you may need to help.

@Jacob Murphy

Would you be willing to share the spreadsheet?

@Candice Crawford

Do you have a comparison of the income and expenses for a waterfront property vs one that is not waterfront in similar areas? Maybe your property vs your client's financials?

@David M.

Correct. The issue is most underwriters are not properly trained and the procedures and systems that they use do not properly account for cash flow. It's takes an underwriter who is willing and wants to challenge themselves to grasp self-employed tax returns.

@Jared Ryan

I just went through this process and was baffled at the underwriting process for our primary home. I've been pushing rentals properties for a few years now and hadn't been through the primary residential process in able 6 years. Now that I'm self employed & COVID, it was ridiculous.

It took 3 different lenders to finally get this done. The first 2 lenders I could tell the underwriting was done incorrectly because they didn't understand the tax return. I have Scheduled Cs, K-1s, & a S-Corp. It wasn't until I found the 3rd lender who understands self-employment income that my income was calculated correctly and matched what I was able to calculate based on Fannie & Freddie guidelines.