All Forum Posts by: Mary Jay

Quote from @Joe Villeneuve:

Quote from @Mary Jay:

Quote from @Bruce Woodruff:

It depends on thr property/ Plenty of properties can cash flow while holding a mortgage. Simple math I think.

Thank you sir!
So you feel like you get plenty of money from your not paid off rentals that allow you to quit your full 

 Having enough cash flow to quit your job isn't a requirement to qualify for cash flow.

If you have to have a paid off property to get positive cf, does that mean I have to give back all my positive cf while I had mortgages on a property?

 Nobody is asking anybody to give up anything.

What I am trying to ask is: from my experience, there is no positive cash flow that actually is really positive. Even if a property cash flows $500 per month usually this cash flow will be eaten up (when a tenant moves out, when something breaks, etc. )
And I am asking other people for their experience, if they feel the same way

Quote from @Bruce Woodruff:

It depends on thr property/ Plenty of properties can cash flow while holding a mortgage. Simple math I think.

Thank you sir!
So you feel like you get plenty of money from your not paid off rentals that allow you to quit your full time job?

A few years ago one of the investors who had multiple properties in Manhatan Beach CA, then Phoenix AZ, who has been doing it for 30-40 years told me: " A property does not really cash flow till its paid off"

Honestly, I am looking at my properties, and half of my properties cash flow anywhere from 800-1k, but the remaining dont cash flow at all..

Honestly, I cant say that even those that do cash flow 800-1k per month do not really make a big impact because a tenant moves out, I have to clean/fix, etc. The house sits empty for a month or so while I am looking for a new tenant. Then something breaks, etc...I would say that all the cash flow is eaten up by fixes on that or another property...

So the more I think about it, the more I agree with her: A property does not really cash flow till its paid off

What do you guys think?

Does your cash flow on unpaid actually goes into your pocket or mainly goes to fixing that or the other properties?

Quote from @Owen Rosen:

Quote from @Mary Jay:

Hi guys, so I had a neighbors tree fall on the roof of my rental. I fixed the roof myself out of my own pocket.

I called the insurance broker  and he straight asked me if there was a damage after the hurricaine, so I said a tree fell but I fixed it myself out of my own pocket. But  he said he still has to report it as a loss to the insurance company. Is it a common practice to report it as a loss even though I fixed it out of my own pocket?

 Does your agent work for the insurance company or are they independent?

 I think he is an independent broker.

Why? It changes things?

I was just surprised that when I asked to change the policy to rental, the first thing he asked was if there was a damage after the hurricane

Quote from @Joe Homs:

@Mary Jay I was not asking you to lie but just answering your question.  "Is it a common practice to report it as a loss even though I fixed it out of my own pocket?"  The short answer is Yes.

Thank you!

Quote from @Joe Homs:

@Mary Jay why did you report it if there was no loss coming out of your pocket.  Honestly, that is all the insurance company needs to report the loss and raise your insurance next year.

Good Investing...

I called my mortgage broker to ask about changing the coverage to the
rental coverage and he asked me if there was any damage after the
hurricane. I did not want to lie and said the neighbors tree fell on the
roof but I fixed the roof out of my own pocket

Am I supposed to say: no, there was no damage after the hurricane?

Quote from @Jay Hurst:

Quote from @Mary Jay:

Quote from @Jay Hurst:

Quote from @Mary Jay:

hi guys,

so I have a lot of equity in one of my rentals but the interest rates are super low on it. so I dont want to do a cash out refinance on it because I dont want to lose the 3% interest rate on it.

I want to get some cash out of it via Heloc or another vehicle, so I could buy another rental, but its not my primary, so I cant get a HELOC on it from lots of banks....

I think PenFed does helocs on rentals, but because I have more than 5 rentals, I dont qualify for their HELOC loan.

IS there a bank that would give a HELOC/cash on a rental?

do not use a line of credit for a down payment.

HELOC= short term use

Fixed (first or second) = long term use like a down payment. 

 I am sorry, I am not good with a financial lingvo, could you please clarify? 

Are you saysing I should not be using a HELOC?

Are you saying I need to take a second mortgage on the rental?

HELOC is an acronym for "home equity line of credit". A line of credit is adjustable rate with interest only payments that will have a "draw" period usually of 3-5 years for investment properties (usually 10 years for primary home) then will amortize over the remaining term after the draw period. This is a the perfect vehicle to use for short term like buying a property with cash, then refinancing the property to pay the line of credit back in full, and use it again. BUT, you will pay 2-3% points higher in rate for this flexibility on an investment property then you would for a fixed second mortgage. The 2-3% points in extra cost are worth it if you plan on using as I described above because the use would be for a few months at most and due to that short term use you can survive a rate adjustment up.

But, if you have no plan to payoff the debt like when using for a down payment on a long term hold why pay the extra cost for flexibility and have the additional risk of the adjustable rate with the amortization looming when you can get a fixed rate second mortgage. 

Thank you, kind sir! So your advice is to get a second mortgage on that rental? Did I understand you correctly?

Quote from @Jay Hurst:

Quote from @Mary Jay:

hi guys,

so I have a lot of equity in one of my rentals but the interest rates are super low on it. so I dont want to do a cash out refinance on it because I dont want to lose the 3% interest rate on it.

I want to get some cash out of it via Heloc or another vehicle, so I could buy another rental, but its not my primary, so I cant get a HELOC on it from lots of banks....

I think PenFed does helocs on rentals, but because I have more than 5 rentals, I dont qualify for their HELOC loan.

IS there a bank that would give a HELOC/cash on a rental?

do not use a line of credit for a down payment.

HELOC= short term use

Fixed (first or second) = long term use like a down payment. 

 I am sorry, I am not good with a financial lingvo, could you please clarify? 

Are you saysing I should not be using a HELOC?

Are you saying I need to take a second mortgage on the rental?

Hi guys, so I had a neighbors tree fall on the roof of my rental. I fixed the roof myself out of my own pocket.

I called the insurance broker  and he straight asked me if there was a damage after the hurricaine, so I said a tree fell but I fixed it myself out of my own pocket. But  he said he still has to report it as a loss to the insurance company. Is it a common practice to report it as a loss even though I fixed it out of my own pocket?

hi guys,

so I have a lot of equity in one of my rentals but the interest rates are super low on it. so I dont want to do a cash out refinance on it because I dont want to lose the 3% interest rate on it.

I want to get some cash out of it via Heloc or another vehicle, so I could buy another rental, but its not my primary, so I cant get a HELOC on it from lots of banks....

I think PenFed does helocs on rentals, but because I have more than 5 rentals, I dont qualify for their HELOC loan.

IS there a bank that would give a HELOC/cash on a rental?