All Forum Posts by: Derek Janssen

Remote Controlled Real Estate Riches by Adriel Gorel has been my go to. Cheesy title, good info. Which markets are you looking at?

I borrowed money from my parents for a flip I once did. I made money on the deal, but will never borrow from my parents again. While the loan was all documented and structured and I made payments on time, I discovered there were undisclosed strings attached to the money. My mom loves those flipping shows and felt as an “investor”, she should get some say in the flip. Whereas I just wanted a clean financial transaction. Your results may be different and I hope they are. One reason I got into real estate investing is bc I’m the boss and wanted to make all the decisions.

20% down. Cash is king in this game. Also, a 30 year fixed mortgage is a great hedge against inflation.

Recommend the book Remote Controlled Real Estate Riches. Cheesy title, good content. I live in SF Bay Area and invest in Phoenix. If u have someone in Michigan who can help, great. Otherwise evaluate each market and find which one u like best. Economy, jobs, appreciation are important to me.

If u have a bunch of equity, I’m going to assume your rents support the place and the unit cashflows. I try to have every unit cashflow on it’s own. If it still cashflows with the additional heloc payment, why not? I have a heloc on my primary residence and saw the rate is up to 6.25%, so I’m not inclined to use it right now. Just make sure ur comfortable with the payment if heloc rates hit 7-8%. It’s all just math :)

I too struggle with this all the time.  My properties are in Phoenix and have lower loan balances and payments.  The good thing about paying off the loans is you don't have to make that loan payment and you can use that as income.  The bad thing about paying off that loan is that your return on equity is much less.  Most real estate gurus I listen to say return on equity is the most important.  But they are all already retired and not going to a corporate job every day.  For me, the prime directive is to retire from my corporate job due to my real estate.  I see that happening by replacing my corporate income with my rental income.  Yeah, it will take longer.  But I think it happens faster than you think or calculate on paper.

I'm finding with rents going up that paying off a few loans is actually doable.  Whatever you are raising the rent by - apply it each month to the mortgage that makes sense.  For me, it's the lowest balance 15 yr fixed mortgage.  Once that payment is eliminated, all of that can be applied toward the next loan.  I know I won't be making as good of return on equity paying off the mortgage, but it gets me closer to walking away from my corporate day job providing me regular income.

I'm running into that also.  I have heard of Exchange Bank (locally) doing HELOCs on rentals, which may help.  I've refinanced and consolidated loans also to eliminate a loan.