All Forum Posts by: David Garrison

This should help regarding PMI questions. You can simply ask to have it removed once you meet the requirements. If you have appreciation in your favor, then it would make sense to refi so it's removed sooner. PMI is just throwing money away so the sooner you can get rid of it by whatever means the better.

http://www.bankrate.com/finance/mortgages/removing-private-mortgage-insurance.aspx

Interest rates are pretty low right now. You should talk to a financial advisor about some low risk possibilities. If you're willing to lock money up for a year or more you're likely to find something better than current MMIA or CD rates.

Best rates you'll find are usually online banks at around 1%. Go here: http://www.bankrate.com/calculators/savings/simple...

Plug your numbers in and see what you'd earn if you just put it in a savings account.

I remember being you when I first started reading this forums. Ready to go but nothing to do but be patient.

Get your credit on point. Stack your cash. Use the time to learn everything you can. Write out your business plan. Set up your interim goals to get you where you want to be. File early so you have the tax return in hand ASAP 2 years from now.

Good luck man. You'll get there.

@Avi Garg is correct on this one.

I'm sure you can find someone that will refi all 3 of those. When you say "I was told"... were you told by someone that thinks they know or someone that definitely knows. I'm in banking and I would be surprised if you can't find someone that will refi those for you.

The rental income needs to be on your taxes for 2 years for banks to consider it. I would spend the next two years making sure your credit is a good as can be and stacking as much cash as you can. 

If you can't secure something through a portfolio lender, you may still have an option through business lending. Just know business loan are usually a slightly higher rate. Usually 1% higher or so.

@Jeff Sheraton

This is good advice. Find a bank that will pay the upfront costs. Just bear in mind that you'll have to apply to start the process and your will have a hard inquiry.

A HELOC can be a great source of funds if your money is mostly tied up in your home.

Using a 2nd can be a great way to secure the funds you need. With rates where they are right now, it's cheap money, too. Keep in mind that draw periods are usually 10 years. You can refinance in perpetuity as long as you still qualify. Just look out for closing penalties if you plan on closing it before the draw period ends. Most HELOCs will have an annual fee as well. That being said, you can pay it down and that money becomes available to use again. If you want to, you can pay it down to zero and it stays open and available to you for the next deal you find. 

Depending on how much equity you have and where you're buying, a HELOC can potentially let you buy multiple properties. For example, I know someone that just acquired a $500k HELOC. Applied during a promotion where the bank paid all the upfront fees and waived the annual fee for the life of the loan. He's buying 4 properties outright in another area and will have money left over for any surprises. According to what he shared, each place should cash flow as long as he can keep them rented. He's a baller and well-known in the area so I don't doubt him.

All depends on your perspective and what you want to do. If the numbers check out, I'd use other people's money as much a you can. That way you still have cash on hand for whatever needs may arise.

How you react to adversity is what makes you who you are. Times may be tough but there's always a light at the end of the tunnel. I'm sure the eviction process is no fun but that's not going to take forever. I bet you're almost finished!

I definitely see some good advice above like hiring a property manager. See what you can take off your plate so you can refocus. 

One of the most important lessons I've learned in life is to not worry about what you can't control. I try to take a step back and analyze my situation. The main question is: Have I done everything within my power to solve 'x' problem? If the answer is no, then I can put my nervous energy into ensuring the solution I'm hoping for. If the answer is yes and I'm waiting on other people or uncontrollable aspects, then I turn my focus on the next positive item that I can accomplish. I will admit that it's sometimes easier said than done. I have to convince myself to do this sometimes.

Stay up. Stay positive. This will all be minor speed bump that you will totally survive. You'll be telling the "remember when I had that eviction" story. Maybe you'll even laugh about it!

You got this!

The one theme I tend to see...

Never stop learning. I spend a lot of time reading and researching about the things I want to do. That's why I'm here tonight. I have a brain that gets bored easy. I always feel the need to do something productive.

Don't get me wrong though. Sometimes I get burned out and I don't want to stare at a computer screen anymore. I still have down time. I definitely spend time binge watching Netflix. Even when I'm doing that, I'll constantly be on my phone searching random questions that pop into my mind. The quest for knowledge should never stop.

I can't remember where I read/heard this saying but it goes something like this:

When you think you know it all, you're at the greatest risk of failure.

Long story short: Stay humble, stay focused, and always keep learning.

I'm not where you're at yet so I wonder how I'll react given a similar situation.

Honestly though, I'm going to start doing this as a means to ensure the success of my family. Buying and renting these properties will provide for many things including my child's education. It's going to allow me to retire and know that I'll have what I need in those years. I'm not going to be greedy. I'm going to get what I need to secure my future.

My job would have no problem firing me if they needed to downsize. My landlords for various apartment complexes have raised my rent. I lost a job while in college because the owner couldn't sell the business and didn't want to keep throwing money at it. The reason I'm still successful today is because I found solutions to my problems. There's always a solution it just depends on whether or not people want to find it.

If you're renting and the property owner is making decisions that negatively effect you, it's time to find a different solution. If the rent is too high, move somewhere cheaper. For example, I live in Monterey, CA. I can't afford to by a home here. I'm not blaming anyone else but that doesn't change the fact that I want to buy a place. So... instead of crying about it... I applied for a transfer to Dallas, TX and I'm moving in a couple weeks. All so I can continue reaching for my goals of buying and renting properties. I found a solution that works for me instead of wallowing in my own self pity. While each person's solution may vary, there is a solution.

Anyone that tries to tell you that you're <insert descriptor here> because of your decisions regarding ensuring your business' success really has no business telling you what you should do. Sometimes, people have to move. They could choose to move right back in and pay market rent in a soon-to-be nicer place. Hopefully, they choose to react well and find their own solid solutions whatever the solution may be.

tl;dr - Not your issue. Life isn't always perfect. The tenants will choose the best solution for them and they'll survive.

Hi Frank,

I worked in an insurance not too long ago. Things may be different since I was in the business but I'd be willing to bet it's close to the same as what I recall. Now, I'm in banking so I rub elbows with a lot of investors in the Santa Cruz, CA area so I always ask them for advice when they visit.

If you incorporate, the business now would technically own the property(ies). This means your personal umbrella no longer covers the properties held by the corporation.

Incorporating has a lot of benefits to reduce your personal liability so I think this could still be a smart idea. If each property is it's own entity (business), a lawsuit on one property will at worst cause you to lose only that property and not your other assets. An LLC may also work depending on your situation. Even with an LLC, the LLC would technically own the property so you'd still be in the same situation.

If I were in your shoes, you should definitely choose an LLC or a corporation to hold the assets. Right now, a tenant could potentially sue you and your assets are on the line. While a $5mil umbrella policy seems like a ton of money. Costs can spiral out of control if you're found negligent for someone being hurt on your property. Anything awarded above that $5 million would be on you. Keep in mind the legal fees you incur will also count against your umbrella's total, not just whatever a court ends up awarding.

You should definitely talk with a lawyer and a CPA to figure out whether an LLC or Corporation would be better for you. I personally lean toward using an LLC but that's just what I think would be right for me.

Good luck getting things squared away for your new entity! It'll be well worth the effort in the end.