All Forum Posts by: Gloria Mirza

I like Jay's advice.  I would keep escrow clean and not create issues with the bank by paying her extra commission.  Although it's illegal to give her a "tip" outside of the purchase contract for this purchase, it would be perfectly legal to hire her as a buyers agent and pay her to help you look for the next house.  

Are you a first time home buyer? If so, I would leverage that with an FHA 3.5% down loan and use it to buy a 4plex. Live in one unit and rent out the other three. This will probably be cash flow positive depending on your area, freeing up your income to qualify for more rentals in the future.

I'm currently looking into refinancing my primary. I looked into HELOC but found it makes more sense to do a refi for me. Once that cash runs out I plan on using my rentals for HELOC. I have had them for 3 years so it shouldn't be too hard to refi. I think a lot of lenders will shy away from doing a HELOC on a property you have held for less than a year.

It is definitely a second job.  I have 8 properties now and it's starting to take up more of my time.  One or two properties is not a big deal though.  You'll probably get a call/issue from each tenant about 3 times a year.  

I would never give out a lock box code to a stranger, but if it is given to you, I don't see the harm in entering.  If something is stolen and the seller tries to go after you, it would be pretty easy to argue that the guy gave you the keys without knowing you so he probably did that with other people too.  

@Nathan W.I'm in the same boat as you. I have exhausted my cash funds to purchase homes and will start doing HELOC/cash out refi to continue buying. I think it is normal and expected to have negative cash flow at first. Something to keep in mind is that part of your payments will go to principal and with 100% financing that amount will be greater than your normal purchase. Also with 100% financing you are super leverages so any house appreciation that occurs while you hold is complete profit and with house appreciation, rent appreciation usually follows unless you are in a bubble which is a completely different post.

Have you considered a cash out refi instead of HELOC? That allows you to spread out payments over a longer term and may help you cash flow. A cash out refi on your primary is even better because you get lower rates and the interest is tax deductible even if your rentals are cash flow negative.

Hi Ryan,

@Ryan 

@Ryan McElroyI'm an Agent who also invests in rentals. My advise is to just get started. I would start with SFR, do lots of research here and on the web to learn how to manage your property. At that point depending on how much you enjoy it you can decide if it's worth getting a license. I'm in California so I can't give you much advice for your local market, but if you need any general investing advice feel free to reach out to me.

Does anybody know a good credit union or bank that does HELOC loans in California? I can live with a 70% LTV but would prefer a lender that can go up to 80% LTV.

Actually lower interest rates cause increased inflation and are the primary tool the fed uses to control rates.  I.e. when inflation is high the fed will raise interest rates and when inflation is too low they will lower interest rates.  Yes as you mentioned corporations will benefit from lower rates and try to increase market share, but they are less influenced by this since their cost of borrowing is less than that of a consumer.  Another point is that producers tend to already have their products at a pretty low profit margin depending on the business they are in, there isn't much room for them to lower rates.  Consumers on the other hand spend more when they can borrow at a cheaper rate.  This is the theory that the Fed operates on and is a given as far as economic theory goes.

I've also thought about when I will be able to retire off my rentals, but I'm currently in the stage of aggressively acquiring more properties.  One thing to factor in when calculating how soon you could retire is inflation.  You can expect your rental income to at least increase with inflation.  If we assume that inflation is 3%, your current rental income is $1000 a month, and you plan on retiring in 10 years, then in 10 years your rent will be 1.03^10 * 1000 = $1,343.  Those are very conservative numbers and areas with increasing home prices like most of California could see much higher growth over a 10 year period.