All Forum Posts by: Jon Kelly

@Andrew Cheek either option is great. If coming up with the down payment is a problem, then you can choose #1. It's great to understand the possibilities and not put limitations on yourself. Start networking with HMLs in your market so you can be prepared to go with #1 if you don't have the down payment. 

8-10 properties in "8 years or so if possible" isn't a real goal. Pick a number and defined timeline. "8 years of so" is too far into the future and probably doesn't excite you too much. Shorten it to 1-3 years. 

@Joe Ruggiero You have two separate things going on here and I would evaluate each on a stand alone basis: 

1. Refinance - I would 100% compare your interest rate to what you can make on your next property. If your interest rate is 2.75% and you can make 12%+ on your next investment then you should max out the amount of the refinance. Your example of needing $25k+ over 30 years is somewhat accurate. You should also include several other benefits for property #2: appreciation, tax benefits, experience, relationships, etc. 

2. Buy down rate - 12 years is a long time. There's a decent chance you will sell or refinance before that period, so the buydown was a waste. Keep the money and go invest it in the next property 

@Joe Ruggiero exactly. That's a win-win. 

I also think $8k is very high, especially if the cash out amount is only $75k. Is it worth it to pay $2-4k to buy down the rate? How many years do you have to hold the property for it to be worth it? 8 years? 10 years? I'd rather keep $2-4k and pay 3.25%

@Joe Ruggiero your strategy should be set based on your goals. When you analyze deals do you have minimum CoC, IRR and cashflow per door metrics?

One of the easier ways to look at this comparing the interest rate on the refinance with the CoC return of the next property you will buy. If your interest rate is 3.75% and you can make 12%+ CoC on the next property then you may want to max out the loan regardless of what happens to the monthly cashflow.

@Julie Flynn What happens if you buy an investment property in a 2nd state? 

Location does not matter. Experience with REI is key.

@Wendy Busa the price has to be adjusted to account for the unknown. If the price is low enough then you can take the risk. Do not buy this at market price expecting things to be OK. 

It seems like the owner is in a position to offer a discount due to: they inherited this property, they want nothing to do with it and the tenants are making it more difficult to sell

@John Graham You answered you're own question when you said, "the numbers don't add up"

@Joseph Schults if the numbers make sense and you have the ability to do a deal, why would there ever be a maximum limit? 

You're taking a risk by not learning through smaller deals and building relationships, but you know what they say about taking more risk...... more reward. 

I would absolutely go for it. Worst case scenario is you get down the road and a lender won't allow it because you or your equity partner don't have the capital or experience. However, you won't know this until you go through it. 

@Brandi Austin search for anything with "new", "newbie", "first time", etc. in the title. 

The podcasts aren't intended to be listened in any specific order. Try to find some of the "newbie" content and then you will begin to dive deeper into topics that interest you. 

@D Mack if this is your client, are you the broker? Why wouldn't you reach out to his attorney to make sure you're on the same page? Should be a quick phone call.