All Forum Posts by: Account Closed

@Samantha Klein - This is my first one where the down payment comes from a cash out refi. I was able to cash out 75% LTV, which was 97k. I plan to acquire a duplex @ 25% down, up to 150k purchase price. Built in the 80s or 90s. Cash flow 600-900/ month. I submitted an offer last week and hope to be under contract soon.

I did similar. Cash out on a free-clear Duplex. Now shopping for another. It's 25% down on the next non-owner occupied duplex. I am upfront my down payment comes from a cash out and no one has rejected me yet.

Counting all your rental income to offset current mortgages is key (including the cashed out, now mortgaged duplex). It may take some time to find a lender who will do this properly and still give good terms and Pre-Approval letter. It will help if you have a document to show your properties, each mortgage, and each rental income.

Do nothing. It's still vested and grows on it's own. Just a slower pace. Won't be anymore contributions from yourself or employer.

Plenty of jobs that have 401k with 6% match. Get another one and with higher salary. Get your salary to market level for your experience. Roll over the 401k to the new job and max it out.

Leases have been really good for my rooming house (A big townhouse + garage). It provides some protection and separates me from being a "boarding" house. I put house rules on there as well. Leases are needed to qualify the rental income to banks as well.

Auto-pay CC system could work. In my experience, most pay cash or go to my bank to deposit.

Qualifications - I have a basic application. I do a free background check. Verify employment or source of income, criminal background, emergency contact. I require security deposit + rent before move in.

Mine requires some work, but not much most times. Cash flow is awesome. I wouldn't get another rooming house though. I also have my exit strategy to rent it out to a family. For now, it's been good.

You need to factor in a cleaner for the common areas (kitchen, bathrooms, hallways, living room) once a month. Unless you want to do it yourself. Around here it averages $100 / cleaning, but with more bathrooms will be more. It gets dirty fast until the tenants learn to clean up after themselves. There should be basic cleanliness rules on that as well. (Also when the trash pick up comes).

If the area has a good market for rooms, you vacancy factor is more like 0%. So long as you vacuum the room and list it right away. It should get filled quickly. If someone turns over before their month is up, I tend to make extra rent money for the month by filling it again. The tenants I qualify tend to stay long term though on month-month room rental leases that don't need to be renewed.

Interest-Only HELOC doesn't force you to pay Principal every month. Only the interest on the balance accrued daily is due at the end of every month. If you run into hard times, you can just pay the interest. Principal is paid as you see fit, which hopefully should be large payments every month.

Why is this an advantage? The monthly minimum payment on the Interest-Only HELOC is much lower and won't affect your DTI as much as a regular HELOC requiring principal & interest payment. So you can qualify for another HELOC or Mortgage even with a full balance if all else is good.

I purchased one with a 401k loan as 20% down for a conventional 30 year fixed. It is for Primary only. Have to live one year and I just rented to roommates which covered both loans, utils, expenses, and still cash flow $700. Great terms on the 401k loan. 20 years 4.5% fixed. Only cost $50 to set up online, zero hassle, and deposited to my account within a week.

The downside is that portion borrowed out is not vested anymore so my 401k is not compounding and gaining as much as before. The upside is my 401k balance is still more than enough for reserves for the next few houses. I still contribute 10% with 5% company match. Though I may pay off the loan soon so I can keep it 100% vested.

Why put the other stuff on the HELOC? You'll have to pay interest on them even if in 2 weeks your paycheck pays it down. If you used a credit card (pay off statement balance every month) or a debit from checking, you wouldn't have to pay interest on the other stuff.

For the 10k draw, just put a big portion of your paycheck to the HELOC. You'll only pay interest on the 10k. I only see the savings to this if your HELOC is a lower rate than your First Mortgage.

It is an expensive area I stay away. 240k+ townhouses that same kind I can get for 170k or below in other parts of Frederick. Rents are higher, but still miss the 1% of purchase price rule. (ex: 240k townhouse rents for 2000/month). You may sit vacant for a very long time trying to rent it out at 2k as well. Condos may be cheaper (220k), but your rent is going to be below 1700/month still miss the 1% rule.

I'm in same situation as you in regards to a duplex, heloc, delayed financing for cash out to pay off helocs used. I have a 10/1 ARM, 3.6% @ 70% LTV in the works for this cash out. So far it looks good and I'm waiting on a Loan Estimate to see the closing costs.

I may just ditch this and continue on my path of paying off the Helocs with my cash flow though. It would take less than 3 years. Instead of paying 3-4k closing cost for a cash out then paying the new loan off over 10 years. Assuming I don't want to risk the ARM after 10 years.