All Forum Posts by: Larry K.

Yes. You can do this and your reasons for doing so are good.

I have done this myself. Get back as much of your cash as you can and then go shopping again!

A way to do it and minimize risk is to have the rental property "cover" your obligations.

First being the payments. The rental covers the loan payments and puts money in your pocket every month, not the other way around.

Second being the debt. You can sell the rental property and cover what you owe on the home loan.

Joshua Dorkin
I see it now. Just like me to be taken in by the shiny picture.

For the two in NJ there is no contact information. Just the company names. Is this right?

How about buying a 2 family and moving into one unit. Renovate the unit you are living in then rent it out and move onto the next 2 family. Not sure of your family situation or how mobile you can be but I think you could have a ball with this approach.

Not sure if a 2-fam can be considered a primary residence but there are huge tax benefits when you sell your primary after living there a certain amount of time.

Lets say the $430/month NOI is right
430x12=5,160 NOI yearly
5,160/30,000=17% cap rate
Not sure how much your are putting down but buying at a 17 cap is a good deal for you.

Can't wait to see that map fill up with dots!

Does anyone think that the silver lining to properties in cities like New York/LA and their suburbs is that they will appreciate better than some of these other say Midwest cities or smaller cities?

I have one 2 family under my belt. Currently holding it successfully with cash flow. A relative watched me do this and now wants to do the next one with me. He may have some buddies who also want in. Not exactly sure how.

Would we form an LLC put money in and then I'd be the "Managing Partner" spearheading most of the search, buy, renovate, and hold?

or, similar to that but after I find the right deal we put together the LLC right before we buy?

How to handle Returns, %'s, my time managing the renovation, then my time managing the property, etc......

Keep in mind I am interested in buy and hold, not fix and sell.

Slightly complicating this is that though I am a buy and hold guy I'm not thrilled about the idea of holding a property for several years with a relative knowing the property management issues that might arise. Perhaps I would need a way for them to be a silent partner.

Yes. Do it.

Dreams have come true and lives turned to nightmares over starting a business with home equity.

How it goes will depend on the success of the business.

Keep in mind that you will be at 100% debt. Downpayments are normally made with cash. Yours will be debt just like the mortgage. It is much harder to make a property cash flow this way.

Just be really careful with the numbers and make sure the property cash flows. If you have a solid plan then go for it.

By the way, using a HELOC is exactly what I did.