All Forum Posts by: Devan W.

That’s why I’m hesitant is because of the potential baggage that comes along with a risky profession like that. Her boyfriend with face tattoos may or may not still be in the picture…if so I need an app from him. Also her 3 kids under 10 years old flipping off the camera on their Christmas card photo last year has me concerned to say the least.

To be clear, I won’t deny the app just because of her profession. I’m just being cautious here with the due diligence process.

Thanks. Maybe I’m just overthinking it.

I'm going through a turnover on my SFH in Denver. The house will be rent ready in 2 weeks and so far the best application I've received is from a "independent contractor" working for a high end strip club. Everything on her application is well above my qualifications…background, credit score, rental history, no pets, income, etc. She provided very thorough documentation. Only thing I don't know is her stage name. Kidding!

Should I continue to be patient and hope for better applications to come in? Her IG profile is definitely not appropriate for my kids to see. I manage this rental myself so I’m not exactly sure how to handle this situation.

Hi BP! Has anyone created an excel sheet that shows the benefits of using leverage to buy more properties? I'm really wanting to compare my current situation vs buying more rentals. I want to see how this would impact my net worth 10-15 years down the road.

For example: I currently have one rental worth $450k with about 5 years and $65k remaining on my loan balance. Obviously, if I keep my current loan, I would have a paid off property in 5 years that rents for $2,500/month.
What if I did a cash-out refi on my current rental and purchased say 4-5 more rental properties? I know there are a ton of variables but I'd like to have a format that allows me to plug in some different numbers. I understand the combination of using leverage and acquiring more properties would help me increase my net worth faster, but I want to see it on paper! I've spent hours in excel making different amortization schedules, etc but I think I end up making it more confusing than it should be. Can anyone help me? Thanks!

@Cody L. WOW...Congrats man! To casually go from 8 units to 150 in a few years is pretty impressive. Hoping to get there one day. Sounds like traveling the world in your private jet like Grant Cardone might be just around the corner for you!!


@Preston Quinn Yes, having 30yr mortgages would certainly help. It's hard to stomach a cash-out refi when I only have 6yrs left on my rental @ 3.75% and the interest rate on my primary home is just 2.75%. We are also considering selling our primary so if that happens, I will of course do a 30yr on my new loan.

Starting a LLC for commercial loans isn't something I've looked into yet but seems like that could be a good option. I'm starting to figure out that finding a good lender is key to moving forward in my situation. Thanks!

@Cody L. That’s awesome. Care to share how you got to that point?

@Brooke Andrea I used Pentagon Federal Credit Union (Penfed.org). The process was very easy and doesn't cost anything out of pocket as long as you keep the HELOC open for a minimum of 2 years.

The max LTV they offer on investment property is 75%. They have great rates too! My HELOC is prime plus 1% and is subject to change quarterly. Good luck!

@Kyle J. That's great news that some lenders will take into consideration my zero balance! I can see both sides of it: yes, I can access the HELOC money at anytime but I can also access my full credit card limit at anytime...any they obviously don't count my CC limit towards my DTI.

The 15yr mortgages were decisions I made several years ago before I discovered BP. I didn’t fully understand that I could potentially make way more money buying additional properties compared to saving 0.5% on my mortgage! Oh well, live and learn! Thanks!

@Joel Thompson @Ramon Flores Thank you both for the feedback. Using hard money is a little intimidating for a newbie like me but would definitely make sense if the deal is good enough. We are also considering downsizing our primary, pocketing some cash, and getting a 30yr term on our next house. That would definitely help our DTI. It's tough to downsize but we really want to build up our passive income!!

Hi BP! Recently, my wife & I decided to get a HELOC on our rental property in hopes of buying more rentals. Our lender said $210k was the max we could qualify for considering the LTV and our DTI (now around 53% with HELOC).

So now we have two 15-yr mortgages (primary & rental) plus a HELOC counting towards our DTI. We both have excellent credit and no other debt besides our mortgages. Even though the HELOC has a zero balance, it still counts against our DTI as if we are utilizing the entire amount. Is financing another rental even an option for us at this point? Are we limited to buying a property with all cash from the HELOC? Are there any lenders that do not take DTI into consideration? Our plan was to buy several rentals by only putting 20-25% down but that doesn't seem like it's going to be an option now.

Also, the deals don't look as good when we factor in the 6.5% variable interest rate from our HELOC. Basically, a $100k deal would cost us $542/month in interest. Seems like it would be hard to cash-flow without using leverage. Do we just need to look for better deals?! 

Any suggestions? Thanks!