All Forum Posts by: Nick Weidner

I was looking to barrow $25K from my 401K.   Talking with a co-worker our 401K allows us to borrow up to 50% up to a certain dollar limit at 4.45%.     I was going to pull the $25K over 36 months paying $371 bi-monthly.

In Texas am I allowed to borrow against my 401K to use the money as a down payment for a rental property?     This would be for my second rental property.

Disclaimer... New Investor, purchased my first duplex this past Sept.  Now to my question:

I understand the 50% rule and the 1% / 2% rule, what amount to you apply the rule?   For example if you purchase a property for $125K an you put down 25%.    What amount to you use when crunching the numbers?   The full purchase price + rehab?   Only the Loan amount?  or  The loan amount + rehab?

I am in Houston as well, I have done a lot of research buying properties at the Harris County Tax auction. This may not help you with your current property but may with future properties. You pull the house up on HCAD to see if the current tax year is paid. You can also pull the district clerks office up online and search through the records base on the sellers name to see if anything as been filed / put on hold or cancelled. That way you have an idea of the tax situation, we all know Harris County taxes are sky high. Hope it all works out for you.

A little on me first, yy wife and I are in our Mid 30’s.  We are debt free expect for our current house we live in.  The past 2 years I have been saving cash and researching real estate investing.  I now have my 20% cash to purchase my first rental.

I am buying my first rental property, I decided to go with a Duplex (with current tenants @ $775 per unit).I have been crunching a lot of numbers. Annual income for the property is $18,600 – I am giving myself a 7% vacancy allowance so the adjusted annual income is $17,280.After Taxes, Insurance, mortgage and property management the NOI is $1338 or $111 per month --- This is with a 15 year note. If I use the same numbers but change the loan to a 30 year my NOI goes to $7908 or $659 per month.

If I do the 30 and pay an extra $200 a month to the principal this brings it down to a 17.6 year note.  Given this is my first rental property, I want it to be a blessing not a burden.  I feel more comfortable doing the 30 year note and paying extra.

A friend of mine says I should do the 15 year

Where can I find an online map that I can up in a geographic ID so it will translate it into an real location or address? I am researching buying Tax Acution property in Texas, in little country towns. Most of the properties have a geographic ID 0000-0000-000000 instead of an address.

Don -

I am refering to getting a house either at a Tax Auticon or a pre-forclosues. I understand your point of the house being worth $30K, but it is worth $30K to you because that is what you have invested in it. On the market it is work $70K

The past few months I have been researching buying property. I have a full time job and I am debt free. Next step is to buy rental property. After researching I am thinking changing my strategy to target properties that are in the re-sale range of $65K - $80K range instead of $150K -$200K range.

I can acquire a $70K house for about 30% - 40% (about $30K) then rent it out for $700 -$1000. Or I can buy a $150K house for about $100K then rent it out for $1200 -$1700.

It makes more sense to me to look at the Mid/Low End houses because there seems to be more profit in them and the ROI is a lot quicker. Granted this goes along with the tenant I put in it.

Does it make sense to anyone or Am I looking at this wrong?

All Thanks for the Welcomes.

Carlos - You mentioned your friend has some material on Tax Austions. Is this published material, I would love to get a copy. It sounds exactly like what I want to do.

I came across this site last week seems to hold a lot of information. About 2 ½ years ago my wife and I buckled down and did Dave Ramsey’s Financial Peace program at our Church – we have been debt free for a little over a year (expect for my mortgage). Now I am looking into real estate more for wealth building rather than replacing my full time job. I would like to slow acquire rental property. I am not a big fan of taking on another mortgage for a rental, I have a few friends who have done this with success.

I currently researching Tax Auctions in Houston and redemption period….etc