All Forum Posts by: Dustin Lavender

Also your payments on the current property does not change. Sorry I missed that the first time through.

This is what I have done repeatedly to get the properties I own. The numbers don't matter to me but will to your lender. First thing you should do is change the way you are saying this. You do not want to pull the equity out. That is refinancing. Don't do that. Instead you want to leverage the equity onward your new purchase. I would suggest going to each of your local banks, at least 4, discuss with them the numbers and that you want to leverage the equity towards the new purchase. They will want to do an independent appraisal. You can either pay for one or go with theirs. Here are local banks will do a "drive by appraisal" and compare comps. This appraisal costs me $150. Tell them you want to use the equity for the down payment, closing costs, and cash out the extra equity. This will raise the loan amount on the new property by whatever amount equity you leverage, so make sure the numbers work for the new property. The beauty of this method is you get a new property with no cash out of pocket. That's no money down, no money for closing cost, and you walk away from closing with a check that should cover your Reno. I have done this with every property I own but 2.

@Thomas S. because they trashed the place when I kicked them out lol.

@Ralph R. i agree an 80k house should rent for more, however, here it does not. The price you pay here doesn't mean crap. This being the case, there is no point in me paying more for a house that rents the same as a 25k house. This market here specifically is different than 2 cities over even. No changes in the foreseeable future or past. I understand people think older and cheaper houses are money pits, buys I like them so not any point arguing the details of why or why not. 

I have had lots of luck with my cheap houses. This one in question is on Par with Turner's hell house he podcasts about the other day. I probably shouldn't have bought it but I did because I own the 3 on the left and one to the right. 5 in a row now. It didn't make sense to let someone else own one right in the middle of mine and let It  be a crack house or some crap. Plus I now own over an acre (1.25) in the middle of the city one block from a subdivision that has steadily been expanding over the last few years.  

Btw: 3 bed houses in that subdivision are selling for 150k+ and rent for $950..... mortgage payment on that is in the high 800's. Tell me how that makes sense.

@Jeff Russell section 8 here is even worse. I can only get $500 for a 2 bed/1 bath on section 8 here in Searcy. Almost no one accepts it here, because You can get higher rents on the open market. Other cities around me vary on the section 8 prices. Each county/zone sets its own HUD prices and here they are low.

@Jeff Russell I wish my market would fetch those rents, but then I guess purchase price would be higher as well. Lol

@Jeff Russell I agree with you. My market here, from what I have seen and read on bigger pockets and by analyzing markets around me, is kind of strange. I could buy a 3 bed/2bath house for 80k, dated, but move in ready. Rent would be $650, maybe. Or I can buy a 20k 2 bed/1bath house put a little bit into, usually under 5k, and it will rent for $550. 

I doll them up just enough to appeal to the college kids, but that's usually it. If I can figure out how to upload pics I will. This is by far our worst house. And even with all of the repairs I need, and intend, to make my rehab this go round will be $600 all in. 

@Brian Ploszay  they usually don't you are correct. These people just like to put holes in walls. And we do screen and do 3 month maintenance inspections on each property. 

@Scott Weaner this is so true. I have 4 kids, so my walls have "decorative art centers" as we like to call the scribbles my kids inevitably put up for us to see. Mostly these tenants were just nasty. 

@Michael Swan I was referring to my 10 unit property above. Message me if you would like more details.

@Michael Swan I appreciate your opinion. You are correct in that I have a lot to learn, however, amongst other things, I own a 10 unit apartment building, so I'm not sure that I am comparing "apples to oranges".

Best of luck on the podcast tomorrow.