All Forum Posts by: Justin Phillips

@Patrick Bisson Very nicely done! The Springs has been blowing up.

@Yoselin Pearce I'm also notorious for getting myself excited about properties without really knowing the area/safety situation. 
It's definitely helpful to have a team or some contacts wherever you're looking to move. You'll want to make sure it's not only a good investment, but also somewhere you'll enjoy living. Best of luck! 

@Kirk Rubin As long as you're living there, there should be no issue renting a room out!
I would definitely have a strong lease signed. Be sure to treat it as a business. 

Sometimes that can be harder with friends, but it's often much easier to share space with someone you enjoy. 
Congrats on starting your real estate investing journey! 

@Jeff Seiff With this loan, you're just paying an interest-only cost based off the daily balance. With all your normal checking deposits being swept directly towards the balance, the loan is essentially Recast every night. 
When possible I usually advise to start with your primary, as you can get a higher LTV and a lower rate, and it's typically the highest value property. You can put it on a investment as well

There are 3 main issues with making extra payments on a traditional fixed loan: 
1. Your payment doesn't get any cheaper next month. 

2. You don't have access to those extra payments without selling or refinancing.

3. You're still paying interest-first on the bank's amortization schedule. 

With this style of loan, the opposite of all 3 are true. Every dollar you deposit, your cost just got cheaper next month. You full access to those payments and equity 24/7. Every deposit you make in the checking account is really a principal only payment, it just doesn't feel like it because you retain full access. 

So my wife and I are parking all idle funds (Regular Checking, Savings, and Emergency Fund) on our line, where it works much harder than any high-yield savings account, tax-free. We ReFi'd into it at these inflated values, so we have access to equity when the market turns and deals are more readily available. When we find our next investment, we'll simply write a check from our line and purchase in cash. 

@Jeff Seiff I'm a big proponent of a specialized first position Heloc that's tied to a zero balance sweep checking account. The initial draw pays off your current mortgage, then all of your regular banking deposits are swept directly towards your remaining balance. With all idle funds and cashflow hitting that balance, it creates a large snowball effect where both the outstanding balance and interest cost are dropping rapidly. Each property purchased or paid off using the line pays off faster than the last with the added cashflow. 
My wife and I have one on our property in Murrieta, and it's been a great tool for us! Our idle funds are working for us, not a bank, and we're maximizing flexibility for when the market turns.

@Account Closed Yes, those are considered closing costs. The main thing usually POC (Paid Outside of Close) is the appraisal. Other than that, most everything will typically be paid at close.  

@Nicholas Z. I'm a big proponent of a specialized first position Heloc that's tied to a zero balance sweep checking account. The initial draw pays off your current mortgage (or is the purchase price), then all of your regular banking deposits are swept directly towards your remaining balance. With all idle funds and cashflow hitting that balance, it creates a large snowball effect where both the outstanding balance and interest cost are dropping rapidly. 
My wife and I have one on our property in Murrieta, and it's been a great tool for us! Our idle funds are working for us, not a bank, and we're maximizing flexibility for when the market turns. 

@Kyle Marsh At the end of the day, it's all about supply and demand. Maybe allow for a slight decrease for the top floor, just to ensure you're running conservative numbers. Worst case, I don't think it would be anything drastically different.
I will say, when a friend asks for my help moving, how available I am depends on what floor they live on ;)

Hey @Jarrett Mel Williams My wife and I were also looking to lock-in a Line of Credit at these inflated values, so we're ready to pounce when the market turns. We ended up ReFi'ing into a very specialized Line of Credit that's tied to a Zero Balance Sweep Checking account. With the ZBA checking, every regular deposit we make into our checking is swept directly towards our remaining balance. Those deposits decrease our interest cost, and increase our credit line available to pull from. 
It's an incredible financial tool that allows my idle funds to work for me, rather than for the bank. When the market does turn, I'll simply write a check out of my line and purchase our next investment in cash. Each property purchased using the line pays off faster than the last with the added cashflow. 
I actually liked the loan so much that I left my job in medical sales to join the broker who specializes in them! I recommend anyone and everyone educate themselves on the loan, it sure beats paying interest first for almost 30 years. 

@Devyn Berg Welcome to the industry! Arizona/Phoenix is an exciting area, with a ton of growth. 
Bigger Pockets is a great place to network and grow your knowledge!