All Forum Posts by: Jairo Ortega

Welcome to BP! Have you considered maybe using a HELOC to update the other properties or buy a multi-family? If you're willing to invest outside the Bay Area, that equity could go a long way.

@Kyle J. A friend of mine buying his home was recently offered a piggyback loan. I didn’t think they offered those anymore. 

Welcome to BP Kyle! Houston is a very exciting market right now. Keep us posted on your progress. 

Welcome to BP. I hear that the Indy market is doing well.  Keep us posted on your progress.

It sounds to me that you should consult with your attorney. I recently asked my attorney about this. He recommended I setup a living will and trust that would dictate what would happen if I were to pass away.

The logic is that you create a Trust now while you're alive and also transfer all assets into it. These assets could include, house, car, 401k, life insurance, etc.

Again, you should really consult with your attorney. There is a lot of legal paper work that needs to happen. I ended up having him just draft a Will. The cost of the Trust was about $3k to cover the legal cost of setting up the Trust and transferring the assets into it. I decided to delay this until i gain a bit more momentum with real estate. In my opinion I don't have that many assets yet.

I hope this helps.

@Lance Lvovsky I like your Trust idea. 

Are there any tax consequences in doing that? Also, I presume there is an initial legal setup fee, but what is the maintenance cost on something like that?

How big of a multifamily are thinking of doing?

If you do 4 units or less ... you could potentially use a creative combo by doing a 1031 exchange of your existing property, financing the new property with a 203k loan AND house hack one of the future units.

By doing so, you could potentially defer capital gains taxes, reduce the money you bring to the table on the 4 unit (typically 3.5%) AND there is a potential to create value by rehabbing the property.

Just an idea. Any thoughts?

I’d consider the long game. Getting into a commercial loan and building up business credit can open the doors to larger lines of business credit down the road.

As mentioned previously, this comes at a slightly higher cost with shorter repayment terms.  But maybe the short losses outgrow the long term gains.

I’d run the numbers on your personal financial situation/plan. 

It sounds to me like you may want to take out your equity (if you have any). I'd look at getting a HELOC. Others may suggest taking the money out through a cash out refinance. My only qualm with that is that you end up locking yourself with a fixed payment that reduces your cash flow. The HELOC has a monthly payment only if you put a balance on it.

@Matthew Meunier Congrats on your deal. Could you tell us more about the lending process? Any lessons learned?