All Forum Posts by: Nathan Williams
Nathan Williams has started 35 posts and replied 167 times.
Post: Intentionally leaving some money in a deal
- Posts 172
- Votes 93
Definitely not a bad idea, there's absolutely nothing wrong with not sucking every penny of equity into a loan that you now have to pay back... all depends on your risk profile.
Post: LA contractor / handyman recs?
- Posts 172
- Votes 93
I know a roof repair guy who does honest assessments and work at very reasonable prices. Did one repair job for $250 when someone else tried to charge like $1000.
I know a painter and trim installer who works on a $200/day flat rate. He did some high end trim work (wainscoting, crown molding) and it looked very professional.
Post: tenant with massive loans
- Posts 172
- Votes 93
Originally posted by @Zoe Lee:
Originally posted by @Nathan Williams:
Ive seen plenty of people with 100K+ loans with monthly payments of under $300
How do these people ever repay their debts? If they cannot, what impact does it have on their lives, on our economy? Scary to think about.
if I recall, if you make every payment your loan discharges in 25 years when you do those income based or similar plans
Post: tenant with massive loans
- Posts 172
- Votes 93
Ive seen plenty of people with 100K+ loans with monthly payments of under $300
Post: Why do a lot of people say stay away from property managers
- Posts 172
- Votes 93
one annoyance I have with the PMs I worked with is that it seems they are always quoting inflated prices for repair jobs, not even considering the service fee some charge to coordinate a repair. I was between PMs for a few months and was able to get repairs done at much cheaper rates... and I live out of state.
Post: Penfed HELOC and homestead exemption requirement
- Posts 172
- Votes 93
ok thanks again... it would have been much less confusing if the loan officer just spelled it out for me that the non-owner occupied loan just flat out would not work in Texas.
Post: From teacher to 10 units in 10 months!
- Posts 172
- Votes 93
wow thats amazing. very interested in learning more of how you ramped up so quickly on additional properties
Post: Penfed HELOC and homestead exemption requirement
- Posts 172
- Votes 93
Hello, I was looking to do a Penfed Heloc on a Houston investment property I have. But I was told a requirement from the mortgage consultant that does not make sense at all: the property must have a Texas homestead exemption in place. But from what I'm reading its impossible for an investment property to have this exemption. Am I missing something here, or is this mortgage consultant probably confusing the non-owner occupied loan with the owner occupied loan?
Thanks
Post: HELOC on Investment Property
- Posts 172
- Votes 93
Originally posted by @Justin R.:
@Risha Walden I think the desire not to have a mortgage is what's making your life harder than it needs to be here. A better approach, IMO, is to take the long term mortgage debt and invest the capital in another asset that you can borrow against as a line of credit. In my case, that other asset is municipal bonds from my state. Others do it with whole life insurance. Pretty much all the sophisticated investors I know are doing this in one form or another. End of the day, it means I'm earning ~3.75% on any extra cash I have lying around in the bank ... plus an arbitrage, depending on the current state of interest rates and the bond market.
In short, it looks like this:
1. Take out a 30y fixed mortgage on the free-and-clear property for, say, $200k. Assume this is at 5%.
2. Buy $200k of, say, NJ municipal bonds with an effective yield of, say, 4.8%.
3. Open an LOC against the bond portfolio. You should be able to borrow up to 80% of value, with a rate of, say, 4.5%.
4. When you need some capital, write a check from your LOC account.
Beyond the value of flexibility, you also get to write off the mortgage interest expense as a business expense, and the income from the bond portfolio is state and federal tax free. Lots of variations on the general strategy, including using T-bills, whole life insurance, and other assets, depending on variables in your life.
End of the day, it's essentially always a missed opportunity not to take a FNMA-backed fixed rate mortgage if you can get it.
thanks for this great info!
can you confirm what you mean by "Take out a 30y fixed mortgage on the free-and-clear property"?
Are you referring to a cash-out refi? Im having trouble even finding refi loans on investment properties
Post: HELOC on Primary Home for Investment Property
- Posts 172
- Votes 93
Originally posted by @Joe Timko:
@Christine Sparks. Christine, first off if the primary home is owned by both you and your husband you will both be named on the HELOC unless you quit claim your husband off title. The HELOC will affect your husbands ability o qualify for a loan on an investment property.
As far as areas to purchase an investments property in Southern California. Right now the best areas I've found are he inland empire and high desert. The prices in those areas haven't appreciated as much as the LA, Orange, San Gabriel Valley areas. Especially the High desert (Hesperia, Victorville, Apple Valley.
On a side note I'm doing some flips in the San Gabriel Valley and inland empire and sometimes need a good electrician. Would like to connect with you guys.
I thought only one spouse needs to be on loan even in community property state... IF the spouse signs consent.