All Forum Posts by: Jeff Copeland

Rates for investment properties have always been about a point higher than what you see advertised for owner occupants, and rates are still historically very low. 

There is no indication of rates coming down in the foreseeable future. If you wait for rates to come down before investing, you could be waiting years, and they still wouldn't get much lower than they are now. 

Sent you a PM with some resources. Plenty of free stuff out there, don't waste your money until you have a solid baseline of knowledge, then seek specialized training. 

Sent you a PM with some resources. 

It's all about equity. Here's an example scenario:

You bought a single family home for $200k 5 years ago. You put 25% ($50k) down at the time, so you owed $150k on the mortgage, and you had $50k in owner equity on day 1. Let's call this Property 1.

Fast Forward 5 years:

Now Property 1 is worth $300k and you owe $135k on the mortgage after making payments for 5 years, which leaves you with $165k in equity. 

You can refinance Property 1 at up to 75% loan-to-value (LTV), so you could get a new mortgage for $225k in a cash-out refi.

After paying off your old mortgage, that leaves you with $90k in cash ($225k new mortgage balance, minus $135k old mortgage payoff) to use to purchase a new property.

If you finance the new property at the same terms (25% down), you can buy another $360k worth of real estate with your $90k in down payment from the refinance. 

The number of properties you refinance isn't that relevant (you could refinance 2 or 3 or 5 properties to generate cash to buy more) - The amount of equity you build up over time via appreciation and debt paydown is the limiting factor. 

Obviously, the example above ignores closing costs to keep things simple. And different types of financing will come with different LTV limits. 25% down (75% LTV) is common for residential investment properties.

In addition to BRRRR, most investors are able to use the appreciation and debt reduction on their rentals to build equity, and then refinance to pull out some of that equity to build their portfolio. 

We have a profile on our blog of one of our clients who went from 1 to 100 doors under 30 years old, while working full time. I'll PM you the link if you want to check it out (they don't like external links in the forums). 

I've worked with Jessica Hathaway at KeithRingLaw .com on a number of eviction and landlord-tenant issues. 

John Redding at Redding Associates PA is also great for general real estate and asset protection stuff. I just recorded a podcast episode about asset protection with him last week. 

Evict TV is also a GREAT resource for Florida landlord tenant law and liability reduction.

A cash out refinance on either or both rentals (at an LTV you're comfortable with...you don't have to max it out at 75%) is an obvious source of low cost capital before interest rates continue to climb.

Often there are local planning councils, economic development offices, and/or conventional and visitors bureaus that track and provide such data. 

The state and local boards of realtors also have a ton of data on the real estate market, obviously. 

What areas are you looking into?

I'd suggest finding a local real estate attorney. Pay for a consultation to make sure you understand the ins and outs of your situation, in addition to getting the tenants on a written lease (even if you keep them month to month). Having the lease accurately reflect the current ownership will make any future written notices and/or legal action much cleaner and clearer. 

Sitting down with an attorney for an hour now will be money well-spent, and will cost you far less than trying to clean up the mess you could inadvertently create if you just stumble forward blindly and get something wrong. 

Here's a great guide on seller financing: https://www.biggerpockets.com/...