All Forum Posts by: Micah Roy

Figured I should update this post as to what I ended up doing. Regardless of how people will feel I believe it's good to put it all out on the table so people can learn from others, be it through their mistakes and what not to do, or just to give others' ideas. Been meaning to do this for a while but my full-time job has recently required much more time.

So, after much debate and time researching different types of options for money (thank you all for your input) an idea I hadn't thought of before popped into my head. I have always been in the mindset of long-term goals. Set them in place, automate them and move to the next investment. This includes my 401K. I have been with my current employer for a very long time and have invested in my 401K pretty heavily. I have it split up, so a portion goes into the company's private stock and a portion goes into the market in forms of index funds. Never really thought about drawing a personal loan on this as the market was doing well and my employer stock has been doing amazing. Recently as the stock market has been dropping, I watched my 401K account go from very good returns to heavy reductions (sometimes freezing). Looking at the performance of each I noticed my employer stock was still growing but was supporting the decline of the stock market.

Digging more into the investment plan I realized I could take a loan against myself (meaning I pay myself back with interest, higher than the current market rate return also). The money borrowed is actually drawn from the underperforming index section of my 401K and not from my employer stock. This essentially would make me more money than I am making from the stock market currently underperforming while still getting the large returns from the employer stock.

This is the route I took to make the repairs for my rental property. I even drew out more than needed to set aside a "reserve" for future emergency repairs/vacancy... like I should have done to begin with and so many of you reminded me of that in your responses to my post. I now have a reserve and planning on saving the rent I am receiving to fund another investment.

Thank you all for your feedback. Look forward to soaking up more knowledge as I continue with more investment opportunities in the near future.

Thank you all for your responses. I am aware the best option is to not have to borrow (in most cases) but due to a couple unforeseen instances with previous tenants we have had to dip pretty hard into the savings. Let’s just say learning to swim in the landlord pool we got thrown in instead of wading. Working on building that cushion back up but in the meantime gotta keep the house up to standard. Been interesting because when we originally purchased the house I believe it was a flip. This has since aligned all of the life of the major things up with each other it feels so we have been repairing or replacing what was worst/needed it the most. This rotation of tenants it just so happens to be the front porch and siding.

As far as I understand the HELOC would just give me a line of credit to use on whatever I would need. So if I couldn't get one on the rental, I could try on the primary and still use the funds for the rental. Is this correct? Obviously I would prefer to keep my primary away from the rental as far as funding goes but if I had too, that's an option.

The time has come for some exterior repairs on my rental property. We have owned the property since 2006. Lived in it for 8 years and have rented it out for the last 7. Interior is up to par with the market minus some minor things that we will be doing. My concern is the exterior. Front porch needs replaced (quoted $11k-$14k). Siding is the old LP and at least two side of the house will need to be redone then repainted. I’m waiting on a few final quotes but I’m estimating we’ll be in the range of $25k-$35k when all done. My question is this: What is the best way to obtain this money to make the repairs? Here are my options. If I’m missing something feel free to add.

Private money (potentially family members).

Loan.

Refi.

Credit card.

I’m leaning towards a refi but I’m balking cause we bought the house $150k at 4.25%, owe about 90k. Home is valued around $340k (same models going for this in the neighborhood). Mortgage payment (principal, interest, insurance and taxes) is $1,050 and the rent payment is $1900. Would love to have the house payed off and this property funds one of the next ones but if I refi I start over on the interest and my rates would be higher. 

First time posting on here. Been in the shadows trying to absorb as much as I can but figured now was a good time to reach out and ask some of the more experienced folks on BP for their advice.

I live in Greenville, South Carolina. I have just been made aware of a house in my neighborhood has had the mortgage re-assigned and the hot is in pre foreclosure. I am vary aware of the value of the homes in my area as well as what the original purchase price was on the home I am interested in. I am quite sure I can make a good profit if I can get the home as is.

My question is this: What is the best way for me to approach this? Speaking with the home owner and seeing if he would be willing to short sale or if the loan is transferable? Or would it be better going to the lender and seeing if they would be willing to work with me? I am not prequalified yet but have funds for quite a bit of downpayment from private money. Should I get prequalified before I approach anyone? Should I find a realtor to assist that is experienced with this sort of transaction?