All Forum Posts by: Matthew McNeil

Matthew McNeil has started 31 posts and replied 686 times.

Originally posted by @Gareth Fisher:

Originally posted by @Matthew McNeil:

Originally posted by @Gareth Fisher:

Originally posted by @Matthew McNeil:

Originally posted by @Gareth Fisher:

I'm in the process of deciding if I would like to acquire another rental property or pay down more debt. What metrics do you prefer to use when assessing the risk of adding more debt to your portfolio?

Thanks in advance.

I make sure my reserve fund provides enough padding in case of a problem.
I pay down enough debt on each property to make sure they can handle a 20% deduction if rental rates go down in my market.
I look at my spread between the market and RE to make sure I'm at balanced based on my long term strategy (I max out our ROTHs).
If those are OK, then I'll look at buying another asset which is what I'm presently doing.

Ok cool, lots of good stuff in here.

First I'm not crazy about stocks. The liquidity aspect of them, makes me prefer to trade them more month to month. The more liquid an asset is the higher risk it becomes. Throw in algos into the mix ...geez!! That being said I do have a portfolio and contributions are being made. So I have that box checked.

Cash reserves, Here it gets a little tricky for me. We have 6 months reserves for all of our rentals, and personal living expenses. However should I include my contracting companies expenses as well? Typically it's pretty cash rich and the majority of the expenses are paid for by the client/job.

Loan to value this is what I was looking at as well for a metric to gauge risk. I was however thinking 50-60 percent. How does one decide on what is a good amount?

When I look at the next 5 years I don't see how we are still in an upward trend. Of course we have been saying that for the past 5.

Do you look at Debt to Income at all? Mine is at 34 percent including taxes and insurance.

From what I understand that is considered healthy.

Thanks in advance

Sure! Your metric is well thought out.
I think the LTV ratio is ultimately up to each investor, but the number you mentioned is what I personally strive for; 50-60%.
However, several BP members would balk at that ratio with their belief that you're buying your cashflow if you go that low on LTV - an entirely reasonable argument.

Ok sounds good.

Would you include your cash reserves in your asset to debt ratio?

Thanks

Personally, I wouldn't, but that's me. Other BP members might have a different perspective. For me, the Cash Reserve is an entirely separate and autonomous entity that sits quietly on the sidelines to be tapped in the event of a crisis. I don't "include" it in any spreadsheet, DTI, Debt to Asset Ratio, LTV, or any another other aspect that would influence my decision to acquire another asset; as long as I know its sitting in a bank protected for unforseen problems.

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Originally posted by @Gareth Fisher:

Originally posted by @Matthew McNeil:

Originally posted by @Gareth Fisher:

Thanks in advance.

Ok cool, lots of good stuff in here.

Loan to value this is what I was looking at as well for a metric to gauge risk. I was however thinking 50-60 percent. How does one decide on what is a good amount?

When I look at the next 5 years I don't see how we are still in an upward trend. Of course we have been saying that for the past 5.

Do you look at Debt to Income at all? Mine is at 34 percent including taxes and insurance.

From what I understand that is considered healthy.

Thanks in advance

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Originally posted by @Gareth Fisher:

Thanks in advance.

0 Votes

Interesting article published today.

https://www.foxbusiness.com/features/10-cities-in-...

To make the list, cities had to have rates of negative equity in excess of 8.2 percent, which is the current the U.S. national average rate of homes “underwater.” combined with the city’s mortgage delinquency rate from Zillow’s February 2019 index.

1 Vote

Originally posted by @Patricia Steiner:

@Matthew McNeil

You know all that "little explaining" you had to do...you won't have to with banks that already have that knowledge. I too lived overseas. I gave my opinion, you gave yours, think that does it.

@Diana Muresan

I was a long-time former wealth banker running the division for an international bank; I also ran the joint venture for an international ocean front builder and a national mortgage lender. I didn't know that I needed to give you my resume in order to give my opinion on a post. I'm embarrassed for you.

continued from above after computer glitch....

The "little explaining" I had to do was to give advice to someone who asked for input. It was NOT directed at you. Your reply to me was that I didn't need to because banks already have that knowledge. Do you realize what you implied with that statement? Should we just reply to every BP member seeking advice to go get it from the bank, lender, accountant, laywer, etc. because we don't need to provide any "little explaining," as you wrote. Its obvious you took my "little explaining" personally which was not directed at you, but you made it to be.

As for my post directed to you, I sincerely asked if you could explain to me what you wrote to the OP in your original response to his question and expound on it because it was somewhat ambiguous. Peace.

1 Vote

Originally posted by @Patricia Steiner:

@Matthew McNeil

You know all that "little explaining" you had to do...you won't have to with banks that already have that knowledge. I too lived overseas. I gave my opinion, you gave yours, think that does it.

@Diana Muresan

The "little explaining" I had to do wasn't for your benefit. It was a reply to the OP. I sincerely asked if you could explain to me what you wrote to the OP in your original response to his question and expound on it because it was somewhat ambiguous. I think you read me wrong.

1 Vote

Originally posted by @Joel Montoya:

Feel like there’s not enough time to attend local REA meet ups? Learning through books and podcasts but want something more interactive? Want to hear what others are doing in their real estate journey and get motivated together?

These are some of the reasons why I’m writing this post. I’m super excited about real estate but want to find others who are just as excited and learn together. I think sharing knowledge with others through text messaging would make everyone involved more motivated to take that first step or next step. Getting messages about articles, book quotes, questions, etc. would remind you there are others out there working towards becoming a better investor just like you are.

In a way, what I’m talking about already exists here on the forum. However it is much more personal when you receive a text message since you typically get most messages from friends and family.

Being that most people have unlimited talk and text, I figured money wouldn’t be an issue implementing this idea.

Let me know what you think. And if you’d like to be my message partner. Let me know. We’ll see how this goes. Maybe we can also do group messages if it doesn’t get too complicated with everyone trying to reply. Happy investing!

Personally, I think texting on the level you're suggesting is self-limiting. BP is its blog format provides the best platform for what you're proposing.

0 Votes

Originally posted by @Tamir Cohen:

Hi all,

Real Estate investor from Israel.

Exploring the financing options for flipping.

Wondering what are the benefits of a US resident vs un-resident (loans etc. )

Thanks,

Tamir

Are you a US citizen? Your post implies either.

Define "benefits."

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Originally posted by @Patricia Steiner:

It won't be a problem...you'll want to approach a bank that does business in London as well as in the US and there's no shortage of those. The mortgage lenders are actually in "go mode" so you should find rates to be competitive as well. What might be limiting is the type of property they will be willing to take as collateral. Multi-family is generally limited to 4 units or less - if accepted at all. SFH, TH, Condos are all readily acceptable.

Sounds like political life where you are - is as wild as it is here...you must feel right at home!

Huh??? you'll want to approach a bank that does business in London as well as in the US and there's no shortage of those.

Having successfully applied for several loans as an American while living overseas to purchase RE in the US, I've never heard of such a thing. And, what does that have to do with applying for a loan. Can you please expound on your advice. I'm intrigued.

1 Vote

Originally posted by @David Choe:

Hi, I'm a US citizen currently living in London. I have a stable job working at a British company, but have not had any US income in the past 9 years. Looking to invest in the US real estate market again, and have enough for a down payment, but curious how feasible it will be to get a mortgage. Anybody have any experience getting a mortgage while living abroad? Thanks!

Hi David. I have experience getting a mortgage while living overseas. Although you don't have any "US" income, you have "income" and your worldwide income is subject to tax according to the IRS which I'm assuming you've been reporting on Tax Form 2555 each year. In addition, any bank accounts you have where you're depositing your non-US income is supposed to be reported by your foreign bank (in London I assume) according to the Foreign Account Tax Compliance Act (FATCA) where you also need to comply by filing a FBAR FinCEN Report 114.

All this to say, your compliance to these will certainly allow you to qualify for a mortgage (not that its a requirement, but supports your claimed income) - which is what I've done many times while living overseas.

The only problem I've encountered is that lenders are not familiar with the the figure that Form 2555 generates and drops into your 1040 because its listed as a credit - currently $103,900. So, it just takes a little explaining for them to understand what's going on. I've always been successful clearing that up with the lender and get approved. Hope that helps.

4 Votes

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All Forum Posts by: Matthew McNeil

Matthew McNeil has started 31 posts and replied 686 times.

Post: Assessing Debt Risk before acquiring another rental

Post: Assessing Debt Risk before acquiring another rental

Post: Assessing Debt Risk before acquiring another rental

Post: Cities nipping at the heels of a potential housing crisis

Post: Getting a mortgage as an expat living abroad

Post: Getting a mortgage as an expat living abroad

Post: Let’s learn through text messaging.

Post: Financing a deal advanteges for US residents

Post: Getting a mortgage as an expat living abroad

Post: Getting a mortgage as an expat living abroad