All Forum Posts by: Matt Madalis

If I take out a HELOC, I can pay it down whenever I want thus minimizing the actual amount I pay in interest (regardless of rate vs cash out). If I cash-out refi, especially my primary residence, I am paying that back over 5, 10, 30 years (because I live there) so significantly more money paid in interest even if rate is lower.

There is not a one-size fits all, it all depends on how long you plan to pay the money back.

Not all HELOCs are interest only.  Some are amortized over 20-30 years and pay down the same way as a cash-out refi or other traditional loan.  The main difference is that, as @Jeff Dulla mentioned, rates are tied to the prime rate which will change over time. I'll second the recommendation to not pull more than can be paid back in 12 months to limit your downside with a HELOC.

I use Cozy and have been pretty pleased with it so far.  The one downside is that it uses ACH as the transfer method and generally takes 3-5 business days to transfer.  Meaning once your tenant hits "send", it will be in your account in 3-5 business days (emphasis on business days so can be longer with weekends or holidays).  The system is good with emails so you'll get a notification once payment is initiated and another once the transaction is completed.

As the above posters mentioned, you do need to have a certain level of knowledge about real estate investing before jumping.  Also want to have an understanding of the market where you plan to invest.  You mention you have 10K to invest in a duplex, tri-plex, or quad-plex and that MA is expensive.  I don't know that market, but I'm guessing $10k may not be enough of a down payment of those types of units.

Investing with IRA funds also adds a level of complexity due to prohibited transactions, among other things, and may be best to save that approach once you get more comfortable investing with non-IRA funds.

Its always good to find local REIAs or meetups.  Partnering or working with an experienced investor would be a great way to gain knowledge.

I've learned the hard way that showing a property that does not "show well" will turn off prospective renters despite your promises to make it pristine before they move it.  The old cliché about making a first impression applies to rental properties as well.

If you are going to rent the property, you have two main options (in Maryland):

  1) Obtain a Lead Risk-Reduction Certificate.  This is both a visual inspection (exterior, interior, etc) for peeling, flaking, cracked paint.  And yes, the outside does matter.  The interior is swiped with dust tabs and sent to a lab for analysis.  This needs to be done each time there is tenant  turnover.

2)  It is possible to obtain a Lead Free Certificate but this requires X-ray scanning and is expensive so you would want to be reasonably sure you have no lead paint before trying this option.  Even if there are layers of lead paint that have been painted over, it won't pass x-ray but can always check with an inspector first.

As @Andrew Michael mentioned, get in contact with a lead abatement contractor.  If the painting is done properly, it should not have to be done every turnover, especially the exterior.

I've gone through inspections with a rental in Frederick, so feel free to message me if you have any other questions.

At a minimum, you could add a maintenance clause to your lease stating the tenant's responsibilities in terms of yard maintenance, etc.  If your city has a code, you can reference that code and state that tenants must follow it, or they are responsible for fines, not you the owner.

That way each tenant will know what is expected going in in terms of maintenance.

I have used Salisbury & McLister for title work.  They are right in Frederick near Baker Park.

Edit for spelling.

@Mike WebbI'd be interested although would have a hard time meeting up during the day

@Meghan Helbick I'm not familiar with your market so cannot comment on the prices but I think you should consider a single property to start because it will be easier to get a single loan.  If Duplex prices are too high, would you consider renting out a room of your home or the basement of something like a townhouse?

With two loans, also come two sets of closing costs which will further add to your costs. 

Good luck.