All Forum Posts by: Marcus B Hsu

Thanks for sharing, @Brad Prahl yes, agree HELOC would make more sense if the amount of money i need to draw is short term, like a BRRRR or quick flip. In this case, i plan to buy and hold. I do want to do a real BRRRR at some point and would definitely consider doing a HELOC then.

@Ingryd Hernandez, @Elise Marquette, @Colin Creighton, @Carol Pennant- Thanks for the explanations, makes good sense. I feel like every time i think about this, i keep saying rate cant get any lower, and then the rate keeps dropping for refi,  but yes purpose of this is for investing more properties, so cash out refi does seem to make more sense.

I have an investment property in Chandler AZ

Appraised value $300k

Loan current balance is $130k, at 4.25% 30 yr fixed.

I put 25% down back in 2015 for it, and has just been going up since then.

To invest in more properties...

Would you do a cash out refi or HELOC ?

I've thought about selling and 1031 to more properties, but dont think it makes sense to sell a property that is cashflow +ve, in a good location, and have great tenant.

Thanks in advance for the advice!

@Brooks Nicholson, thanks for sharing. I've been investing as an out of state investor in Goodyear and Chandler. Do you mind sharing what is rental comps, if this is a 3Br/2Ba, and the numbers? like is it cash flow positive or break even once rented?

@Christopher Xavier, there wasn't like 1 thing that helped to be honest, it was just a lot of reading/research on cities people mention on BP, followed by finding info on citydata or online sites about the cities. To me it was important to invest in states that are "Landlord friendly", positive cashflow and with good potential upside for appreciation. Talking with others at meetup, getting the view and information from local realtors, and really just pulling the trigger and just go for it. AZ was an easier since i used to live there and am more familiar with the cities, geographical layout etc, but i have never been to AL before i started investing there. i think once you read David Greene's book, if you agree with him, you'll realize that it doesn't really matter if you live there or not, it all comes down to having a great team working for you, and with the internet, you can really do a lot of the knowledge understanding before making a trip out there to figure out that's where you want to invest in.

@Christopher Xavier, welcome to BP! i live in San Diego as well, and i dont invest in SD for multiple reasons, cash flow being one of them. I invest in both AZ and AL, i think reading David Greene's "Long Distance Real Estate Investing" helps frame the mindset if that's what you are thinking of doing. Best of luck! 

@Bill Goodland, The holding/opportunity cost was worse than I anticipated, with property sitting idle in December, followed by Covid19 and property mgmt changes. Had i known all these, i definitely would have just rented it out and worry about rehab at a later date. 

If none of those delays had happened, i think we are basically comparing:

1. No rehab- ~$200 less/month in rent. so difference of $2400/year in less revenue.

2. Rehab- 5-7 weeks difference (i.e. holding + rehab (~$22k)). 

So from purely rent, rehab would not make financial sense. But from ARV standpoint and future cashout refi potential, it would. My view (and i could be wrong) of it was to have the rehab done so it improves my future exit strategies.

Still learning the real estate game so definitely appreciate your question, it did make me think on why i did what i did :).

@Bill Goodland, @Alison Evans,

It's a fair point, the rent difference would be small relative to the rehab cost.

Hi @Luke Marsh, we found the renter through Zillow. The property is managed by property management (but i helped with getting it advertised on zillow). I do manage out of state rentals but not this one. Biggest challenges with  managing out of state rentals yourself is when lease ends, and when renters who are late on rent. For most other things, it can be done pretty easily over the phone/email. I will have to write about managing out of state rentals on a future post.