All Forum Posts by: Polo Vazquez

@Dan Heuschele you are right! I compete forgot that if you reinvest your gains in stocks (meaning you don't sell your gains and reinvest your dividends) you can achieve exponential growth as well!

I still believe it's easy to match the growth of an index fund by buying RE at a fair value and easy to outperform indexes I'd you buy good deals!

However I would never advice against buying indexes. It's a great way to exponentially grow your money with minimal efforts.

By the way Fidelity now offers index funds with 0% maintenance fees.

@Gerardo Escutia I assumed repairs, mortgage, insurance and tax equal the amount you would be getting in rent. I still don't recommend this. You should always buy with cash flow and take loan paydown and appreciation as extra.

@Anthony Then. Do both. Have your money on an index fund while you are shopping around for a house. Once you find it, pull it, buy the deal, then refinance and put the money back into an index fund again. Only problem with this is if market falls you might not have money to buy a deal while it comes back up. So I would't do all of it.

That being said, If you buy a deal for $100,000 with 20% down at 4% interest in which you make no money (suppose your rents equal expenses including mortgage etc), your loan paydown on year one about $1400. That means you increased your net worth by $1400 with a $20,000 investment. That is about 7% return. On year 10 you will be paying down about $2000 for that year. That gives you 10%  return and it just keeps increasing!

I do not recommend you buy a property with no cash flow as I showed in this scenario. My point is, just by the fact that the property is paying itself off you probably are already beating most mutual funds and stock indexes. 

We advertise 600 as a requisite to rent with us but if I was strict about it I wouldn't be able to find any renters in my area (South Texas). It is almost like nobody really understands how it works and the value of having a good credit in my area and neither did their parents so the scycle continues. So yeah, most my tenants have around 500ish, but have a good income and no evictions. ALWAYS look at evictions.

I know hard money lenders like lendinghome and lendingone will actually do 30 year fixed rates and ARMs. Right now their interest rates are around 6 to 8% which is not bad when you compare it to mortgages a few years ago. Their closing costs are also reasonable.

@Bryce Strange Hey Bryce! I can do 3d tours of any properties you wish to buy in San Antonio. DM me for pricing and details. They would really help you have a better fill of what the property layout looks like and they are also detailed enough that you can see cosmetic defects on the property.

@Bryant Brislin I have all my investment properties in the valley. I send you a request to connect. I'd sure love to see what you have on stock.

If you just want to straight out take equity out but keep the property then you can do a cash out refinance. Keep in mind, this will reset your payment plan back to 30 years and it might cause your monthly payment to go up.

If you are looking for a way to get quick access to money for short periods of time then you should probably get a Home equity line of credit. This works like a credit card so it can be very usefull. For example, you can use this to buy properties in cash, fix them up and then get a mortgage on the new and improved property. Once you take the money out of the new property through getting a mortgage you can repay your Home Equity Line of Credit essentially parking your money again for when you need it again. Home equity line of credits have low interest rates compared to hard money lenders and personal loans.

Option number 3 would be to sell the property but or course, you would have to pay Taxes, realtor fees, closing costs etc etc etc. They can add up to a lot!

If you don't want to sell you could just refinance to pull money out to use to buy another property. But this will also increase your payment lowering your DTI ratio.

Or you can get a HELOC, it can be a bit hard to get a Heloc on rental properties but banks like Penfed do it. If the property appreciated 60k and you have paid down another 40k on the mortgage you can get a Heloc for 80k.

I wouldn't worry about picking out a lender since their policies and loan programs can change anyway. However I would educate myself on how mortgages work, what you need to have to meet lender requirements such as debt to income, work history etc.

As far as picking a realtor, a realtor I wouldn't waste their time if you are not ready to make the purchase or don't have the money to do so. Realtors usually won't pay attention to you until you are prequalified by a lender.

If you do have the money and meet all the requirements to get a mortgage then I would just start looking for the property now, buy it and rent out all the units. Enjoy the extra cashflow until you are out of college and once you are ready to move just wait until one of your tenant's leases expires and don't renovate it.

I have the same issue. I know some lenders will only require lease and proof of income but most require for you to have filed taxes on them already. If you find a lender that doesn't let me know hahaha

You can get a hard money loan to finance it. However they only finance rentals so what you can do is rent it for a year, then refinance it out once you get yor DTI up. This doesn't solve your problem if you are trying to move now but if you see a house you really really like you could do it.

You could probably get a cosigner too, but remember this person will have the loan attached to them and it will be affection their DTI until you refinance and take them off.