All Forum Posts by: Nathan Frost

If you’re losing sleep over it, consider selling one. But not two or three. See if one moves the needle for your sleep and mental well-being. Losing sleep and the associated stress could negatively impact your personal and professional life… which could REALLY hurt your finances even more.

One of my golden rules is put your personal (physical, mental, emotional) health first. And everything else, including your finances, will be better off for it. 

All that to say, after reading several of the OP posts, I think the financially savvy move is to not sell. But given his mental frame of mind, I think he should sell one.

@Nathan Frost

If you take out the HELOC then you're putting your home on the line, even if it's just a backup. I'm not willing to do that with my house. Personal preference

@Nathan Frost you’re talking about taking on more debt to provide a cushion.

You can obviously save money with your job. Otherwise you wouldn’t have a portfolio this big.

Self fund your reserves with savings and the cash flows

If your "cash flow" estimate doesn't include vacancy, repairs, and cap ex then it isn't cash flow. Ignore the fantasy advice you're getting from some who don't know what they're talking about. Also ignore the cash flow claims of your friends with STRs. 

In East TX right now a lot of properties won't have positive cash flow if financed, which means they don't make good rentals. It sounds like that includes most of your properties. I was talking to my local loan officer the other day who said they are making zero loans on small rental properties right now because the numbers don't work on any of them. 

After all is considered it sounds like you have negative cash flow. If that's really the case you need to sell whatever is necessary to get to somewhat positive cash flow before you burn through your nest egg and start losing properties to foreclosure.

@Nathan Frost

Keep grinding it out. You’re putting cash in your pocket every month and paying down your loan. Look at how much of your payment is going to principal every month

Hard pass on option 2. If your only going to break even you might as well keep them and continue to build equity

Option 4. Shop your insurance and protest your property tax valuation.

You could also pay down one of the loans and the ask your lender to reamortize the loan

They're both just too far out of the city to get high demand from renters. Vacancies just persist too long. People would prefer to be in WF itself. Selling is tough there. Almost bought a property in IP in 2018 but glad I was outbid. I never invested in BB due to higher taxes.

Who's your PM? Mine used to be good but is really slipping now.

Hi Nathan,

I have 4 properties all in WF proper. I can tell you that now is NOT a great time to sell. I have one up for sale (2029 Gloria Ln), and it's cold as ice out there right now. Every realtor in town is talking about how things fell off a cliff in March.

If it were me, I'd probably sell the one in Holliday and the one in Iowa Park. You're going to find it very tough to sell single bath homes right now. I think the one you've got on Parklane and the Burkburnett properties are probably fine, but over time, you might want to cycle out of the others for the most part. Gonna be tough to tell right now, though, and I can sell you that from experience!

Quote from @JD Martin:

Quote from @Sunil Kapoor:

Just curious of what others think of this Plan B option.  Since these properties are on the low-mid price range, and buyers of these properties might have below average credit, would selling these properties using seller financing be a good exit?  In this regard, you will still own the note, get payments monthly, and likely a higher selling price?  Has anyone used this strategy to exit from LTR properties?

 He doesn't have anything to sell using owner financing; the properties already have notes in place. He would have to something like a sub-to deal. This isn't really beneficial for the seller unless S/he can't make the payments any more and believe someone else can/will make the payments, because they are still on the hook for the mortgage. Their lender will likely call the note once they realize what's occurring. 

exactly you dont sell on owner contract props that have DSCR loans on them that can lead to a very quick default of the entire portfolio.. As I am sure  the OP knows one default and they all default plus default interest etc etc.  Its too late but the refi to you die scenario can be a very risky one in low value basically non appreciating assets.  if it was me I would be trying to sell them all pay off all debt and start over.  OR bed is made going to have to grind it out.. and pray you dont have some bad turnovers and bad tenants.

Quote from @Nathan Frost:

Quote from @Henry Clark:

Your byline says Wichita Falls but your topic line at the bottom says Lubbock.  Where are your investments?  I love Lubbock Longterm.  Don’t like Wichita Falls.  But each will work with different strategies. 

You might try different strategies:  Don't answer.

1. You have equity in your house. Sell it as a primary 2/5 years no taxes. Move into one of your other units you can get the most value from an ADU or BRRR then 2/5 it. Depends on your family situation. Job and

Home location do they need to be close?  Etc.

2.  Your in Texas, use that to your advantage..    
 
3.  If in Wichita Falls start a trailer park.  Rent the lots and not the homes.  No zoning in Texas counties.     

4.  Texas property tax sales. Buy the unlisted properties.  Pick nasty or strategic and flip.   Land only and not houses.  This is to get more cash around you.

5.  Map out your end game or expectations. See which path will get you there and the resources needed.  

 Their all in the Wichita Falls area.  So just rent steady and not much appreciation.

Evaluate your Longterm goals. Then map out an REI strategy that will get you there. In Wichita Falls I would be looking at trailer parks. You don't want to own the trailers. Use the hard REI investing environment to your advantage. People will be pushed downward to lower cost housing for years to come.