All Forum Posts by: Account Closed

Dave thank you very much for the thorough response.  Depending on the properties that get brought to my attention I may use that strategy of 1031 call and then cash out.  

It will be an interesting adventure since this may occur across state lines too.  

I am considering selling one or all of my properties in order to get into the multi-family business.  On certain deals if I assume that I need 25% down, I could exchange one property I have and add a bit of cash to make it work - but I don't know if the adding-cash part can be done.  I did some searches through older forums but didn't come across an answer.  Any thoughts? 

When you say south Jax, that can mean a few things. There's Mandarin where I live which is still in Duval county, but there is a large higher-end development just a bit further south called Nocatee (which is actually in St. John's county. There is a Jacksonville REI meetup. I'm actually going to my second local Mandarin meeting tonight. Do a Google search, it's still too early for me to give you my impression.

@Brandon Hicks

Thanks for the post - I am in the process of learning how to start to really scale up  so that I can hit my 10yr goals.  I really appreciate the insight and the detail.  

I'm a pretty conservative guy, so when I was budgeting for my properties I wanted to make sure that even when (not if) I got financially caught off guard, I wouldn't have to worry too much.  

I made sure that I always had enough cash set aside to cover my family's current monthly living expenses plus the rentals carrying costs for six months.  

I have a professional job where I deal with people directly all day long.  So while I could probably make some good judgement calls on selecting the right tenant, I DON'T WANT TO.  I'm willing to give up what the property manager is charging so that I don't have to waste time (away from my family or my primary occupation) doing the following

- playing phone tag with tenants and/or contractors

- arranging repairs

- doing work myself

You should still be bringing in money after paying the manager.  As others have said, the property will be rented better, and kept up better.  In your situation this may even increase the value to a point where in a few years, you could sell it at a better price.  

I don't think my post was clear.  I have 3 residential rental properties and my plan was to take the equity that has appreciated above my purchase price and use it to buy another residential house cash.  He said a number of times that most banks would be shy to do this b/c of getting burned a few years ago, but I know Wells Fargo will do it, I just haven't talked with them yet.  He also said his bank is a smaller bank (they don't do residential mortgages anymore).  There are plenty of banks in the area, moving on to the next one.  

I met with a commercial lender to see if I could put together a line of credit collateralized by the properties I already have.  He said he could do it, but I would be refinancing my cheap 30yr mortgages into shorter 15yrs, and they would adjust every 5yrs.  Not to mention the points and other costs involved.  

So, thank you; but no.  

What I gathered from the conversation was that I should probably get a little more equity in my primary residence, then I could secure a HELOC on that and THEN go shopping for new rentals.

The goal of all this was to get into a position where I could buy a midrange house for cash, then refi into a 30yr mortgage.  

Next steps:

1.  Find a lender that will lend me money based on the appraised value. 

2.  Find deals that will appraise for at least 20% more than my purchase price.  

Any thoughts?

I think alot about this question too.  I only have three properties, but all three are new enough so that they aren't falling apart and don't need regular maintenance, but they are old enough to where big ticket items like roofs and AC systems are starting to look like part of the future.  

Like Elizabeth said, for now given the appreciation that I have seen just over the last few years, I'm willing to have lower cashflow, but I wouldn't want to have less than that in the properties because if things turned around in the slightest it would make exiting them in case of a total disaster harder.  

This seems like a bit of a gamble for you b/c of the lack of budgeting for normal expenses.  I have to assume you are under contract for it, so I would get the last few years of records of whatever work has been done on the place just so you know what you are getting yourself into.  

If there really is a wait list it seems like you have the opportunity to raise the rents a bit as turnover occurs which could be a good thing.  

But if you really don't have that much cash and you have a few other properties, why not sell off one or two of the lower end ones that require too much attention?