All Forum Posts by: Jody Sperling

If the duplex is your residence, find a local bank or credit union that will do a first lien HELOC. You'll get as much as 95% LTV, the refinance costs will be negligible, and you only pay interest on the money you use as opposed to paying interest on all the money. The rate may appear higher, but when you consider how much money you pay interest on, and how quickly you can pay down a line of credit safely compared to a loan, it's a no brainer.

Otherwise, with refinancing, don't worry about who you go with. Get the most money you can at the lowest rate.

HELOC. Even if you don't get fancy with it, you'll save tons of money and have access to more. Don't compare interest rates, compare velocity.

You want to have access to emergency cash for issues with the rental, so you'll always be setting aside a portion of the rent to that purpose rather than paying it back to the mortgage. If you have a HELOC you can pay it back to the "mortgage" thereby lowering your principal and reducing the interest charged. It snowballs quickly and before you know it you've paid off the property in 5 years, or completely recharged your buying power, however you view it.

One thing, if you haven't found a first lien HELOC, go get that instead. It's more efficient and really supercharges cash flow. Best of luck!

If you can afford the downpayment on a multifamily in San Diego, no matter what kind of loan, it's a great way to get into the rental market. Real estate in California is outrageously expensive and competitive.

That said, if I had it to over again, I think I'd spend the bulk of my money mailing for off-market housing that I could acquire for 50% or less of market value. Those properties, while usually needing in-depth rehabs, give the most potential return. Hard money, though expensive, can support the purchase and rehab. The one house that fits that description in my portfolio gave me the resources to buy the next two rentals I acquired.

In my experience, a fixer-upper is the fastest wealth builder, but they tend to be hard to find. Go for the multifamily and get started, then put your energy into building a network of investors here and in your market. Go to meetups and you'll be shocked how many deals can come your way. Best of luck!

My W-2 is with a company called Mspark, though I believe in your area the direct mail provider is Mailbox Merchants. There are also companies that service smaller direct mail sets, but you could partner with someone at MM in your area and hit 10,000 mailboxes, targeting only apartments. Many direct mail companies have the ability to target housing type.

I can't personally help you, but I can connect you with a mail rep in your area if you want, or feel free to message me for further detail. Best of luck!

I think you are seeking someone to tell you it's okay that you aren't handy, and if that's the case, I"m telling you it's okay that you aren't handy. There's nothing wrong with hiring someone to change your oil any more than it's not wrong to hire someone to mount your sink.

Between my wife and I (pretty much just my wife), we can usually DIY if needed, but it's always harder, sloppier, and more time-consuming than if we could hire a contractor. The big factor is money. Are you willing to spend what it costs in money to hire the job?

If the answer is yes, hire someone.

3. HELOC. I'm not a CPA giving financial advice, but in my experience the interest is tax deductible. Lines of credit used to buy assets are the best form of money in existence. You aren't charged interest on money you don't use, and you can repay the money you use as quickly as you like and see immediate results in reduction of interest payments.

Go for it. The differences in a commercial mortgage and a residential mortgage are minimal. You'll have to have a larger downpayment: 25%, usually a higher interest rate, and often but not always a shorter lending period: 20yrs is frequent. 

All but two of my mortgages are commercial, and I don't even speak with the residential lending arm at my bank anymore. Not worth the hassle and extra paperwork. Plus, to make a career of real estate, especially as a rookie, you have to move way faster than the residential side allows. Best of luck!

Many thousands of people pay ridiculous money for a degree they don't even end up using, and in those cases, I always say it's better to quit and avoid the devastating debt burden, but in your case, with college being free, you'd be crazy not to get the degree. I don't use mine directly, but I'm glad I have it. It did allow me to work a lucrative W-2 for an insurance carrier while buying rental houses with the extra income. I can say with confidence that my degree has paid off, even with the heavy debt I had to repay.

Try to focus on finishing early, take classes that actually interest you, and take advantage of the social aspect. There are many people in college today who will be successful and well-connected tomorrow. Knowing them might position you for future deals. It's a good network to have if you build it with an eye on that goal.

Best of luck!

The big downside to the wait-and-see approach would be that if you try to get a first lien HELOC on an investment property they will only give you 75 to 80% LTV whereas if you tried for the first line HELOC and owned it as your primary residence you can get up to 95% LTV.

But from a purely safety perspective wait-and-see is perfectly fine.

Rent it. Even if you can't get the kind of price Zillow says you should get, you can cash flow. But try one thing first: Find a bank (will have to be local) and learn who works with first lien HELOCs. It can be a challenge because banks don't want to advertise this product. Get the bank to convert your mortgage to a first lien HELOC.

It may appear on paper that you'll have a higher interest rate, but don't trust your eyes. By converting to a first lien HELOC, you'll immediately gain access to the money you need for the rehab costs you detailed. Then you aren't using cash savings. Place renters in the home. Deposit the entire rent payment into the HELOC each month. Because you will be "overpaying" the "mortgage" it will snowball equity, quickly reducing your interest burden.

If you did nothing else but deposit the whole rent payment into the account each month, you would pay off the balance in the HELOC within 10 or 11 years. Moreover, should that roof need replaced, you again have access to the money for the project in the stored "equity" of the property itself.

That would be a very safe start. Best of luck!