All Forum Posts by: Mark-Anthony Villaflor

Good morning BP members! I'm interested in getting a couple more properties while rates are still low. The downpayment for 1-3 new rentals would come from a cash refi I'm looking at doing on two properties I purchased in Texas in 2012/2013. There's a decent chunk of equity built in given the appreciation in the market during that time but with the larger loan I'll negative cash flow by about 300 a month (includes PITI), see below.

4807 Pachuca Court Dallas, TX 75236 purchased 2014 At purchase 80/20 LTV

• 115,000 original purchase price
• 86,500 current loan, 4.5%
• 1250 current monthly rent

2018 Under 75/25 ltv cash refinance

• 165,000 appraisal likely to come in
• 123,750 loan 75%
• 123,750-76,132.45 (current balance on existing loan) = 47,617.55

1. I’m just curious how you view negative cash flow on a strategy like this. Do we just assume that the negative cash flow will go away once inflation and rents increase? When analyzing should I look at the cash flow between all the properties rather than just one by one.

I’m not banking solely on cash flow and am considering the negative cash flow as an “out of pocket” investment as a way to be able to purchase the additional property. I wouldn't be able to come up with the cash for a downpayment to expand my portfolio. I figure the appreciation on the new property and the one being refinanced would make up for the negative cash flow. Also a positive cash flow on a new property would help my overall cash flow across all properties. 

2. If I did a cash refi and then realized I couldn't handle the negative cash flow, I could always just do a 1031 exchange a year or two later. But would it simply be better to just do a 1031 now instead of a cash refi?

3. What am I missing in my analysis and considerations?

4. Is it normal to go negative cash flow on a property that gets refinanced when trying to pull out equity from appreciation?

Any and all feedback and help would be appreciated! 

Love from the Philippines!

Did you end up refinancing? I'm stuck in the same issue and am trying to figure out if I should just 1031 the property instead of refinancing it.

@Joe Villeneuve got those clarified by the lender! Thanks. 

After seeing the numbers, cash refinancing the will lead to a negative cash flow on both properties because the loan becomes much bigger. Is it still worth doing a cash refi?

It’s been awhile since I’ve done any sort of real estate investing so I’m just trying to see if I have this all correct. I’ve built some equity on two properties in Texas.

In 2014 I purchased a house with 20% down.

• 115000 original purchase price
• 86500 original loan
• I'm looking at doing a cash refinance and I believe the LTV for that is 75/25

My assumptions are:

• 160,000 appraisal
• 120,000 loan 80%
• 40,000 20% downpayment
• 120000-76,132.45 (current balance on existing loan) =43,867.55 cash

I’m looking at purchasing 1-2 single family rentals with the cash I receive.

What fees would I incur with doing a cash refinance with these numbers? For some reason I recall that a cash refinance like this would be $5000-7000 but can’t remember what this was from.

What considerations should I have moving forward? Or what strategy am I missing given this info? 

Thanks thanks in advance!

Thanks guys. There was a lot of negative comments from a lot of investors that purchased through this particular seller and msot investors got burned for reasons ranging from not getting the correct type of financing, having crappy tenants, and overpaying so numbers weren't making sense.

I'm getting my property management over there to take pics and do a walkthrough to get some peace of mind. But really had no idea how bad the neighborhood was and that's what's thrown me off as I wouldn't have originally invested there if I knew (it was my first rental).

Thanks again Elizabeth and Aaron.

The houses is new but I'm worried as it ages the rents will go down and I'm concerned about the price when I decide to sell. Also, after speaking to a few investors who were in teh area it just seems like the area doesn't attract a good type of tenants.

Hey all,

I got a house in a C/D class neighbourhood and paid too much about 115k. It was new construction about 1.5 years ago when I bought it and hasn't had any vacancy and the tenants are there for another 1.5 yr renting for 1205 a month. The house is in the Redbird neighbourhood in Duncanville Dallas Texas. The current market is showing the same types of houses are selling for around 90k. I got in unaware the neighbourhood wasn't that great and have heard stories of tenants trashing houses in the neighbhourhood from others who invested there. It's still cash-flowing. I put 20% down and really don't want to lose all my down if possible and definitely want to not have to put in extra cash if I sell.

What are my options? What are your suggestions?

Thanks.

Joel Owens i've had property management in place and haven't had too many issues other than small repairs here and there. I've mainly done turnkey SFHs, properties are in Dallas and Atlanta.

Paul Timmins Thanks for introducing me to AREAA looked good and I'll dig a bit deeper.

Kanise Kelley you mentioned you haven't gotten anything overseas, have your purchased in the states?

Hi all,
This is my first post yay! Just started investing in real estate a couple years ago. Own 3 SFHs and a 4th currently under contract in the states and 2 condos in the Philippines. Im looking at expanding my portfolio and have thought about having my 5th property in the states be a multi-family (probably something small like a duplex/triplex).

What advice would you have for someone knew to multifam especially with respect to the market right now?

What are the differences in financing?

What's your typical percentage of income for a contingency fund for repairs and maintenance?

Also, I'm in China so I'm wondering about issues being remote?

Thanks,
Mark