All Forum Posts by: Lam N.

Question.  I know that penfed will give heloc on investment properties if you have 4 or less. Is it 4 or less properties or is it 4 or less mortgages? We own 8 outright. No loan on them at all. 

 Just exploring our options. Do you happen to know of another organization beside pen fed that gives heloc to rental properties? 

 Any idea if they give heloc to rental properties? We own 8 outright. 

Your Debt to income ratio is too high from their perspective. 

In my experience, banks will not count your income from the Airbnb or any other rental. So, from their perspective, you only have your husband's full time job's income. 

on the debt side of the equation, they will use the absolute worst case scenario. It wouldn't surprise me if they actually maxed out your heloc. The house under contract to sell hasn't sold yet. They will assume the buyer will have a heart attack and die so the deal will not go through. 

It's a DTI problem.

https://www.sproutmortgagedire...

Not talking about sprout financial. I'm talking about sprout mortgage direct. Anyone has any experience with these guys? 

Over the years, I have definitely noticed that almost everybody has some kind of plan like flipping a house, getting a rental, etc.  But almost all of them never got it started.

For example, in our last flip which we made a ton of money on, both neighbors on either side talked with us and told us they'd been thinking of flipping a house with their cousin/brother/whoever for years.  At restaurants, dog park, where ever.  Every time the topic of who does what comes up and people hear we are now full time investors, they always say they've been planning so-and-so forever.  

There is a couple we've been friends with for years.  They'd been wanting to house hack forever.  When they were ready to buy their first house, they actively looked for a duplex where they could live on one side and rent out the other.  They'd been living in a duplex where they pay the landlord's mortgage.  That's where they got the idea from.  So, they asked us plenty of questions.  We guided them through the process and even evaluated the duplexes for them.  Found a perfect one that was well within their price range that needed very minimal work.  Then all of a sudden, they bought a single family home.  

Why do you think most people never pursue their plan/dream?  

Once we really wanted to work toward financial independence, we needed to save every penny we could.  So, after living together for 5 years, we got married the cheapest way possible.  We quietly went to the courthouse and got married there.  Did not tell anyone.  Cost less than $40.  

We recently achieved financial independence with real estate investment.  

Nowadays, I often feel kinda sad that we skipped having a wedding.  My husband always tells me he didn't mind, but I often wonder if he really didn't mind or if he just went along with it.  I was the one who came up with the plan toward FI and I was the one that suggested we skipped having a wedding to save money for it.  It particularly hit hard every time one of our friends or someone else we know got married.  

What sacrifices have you made and do you now regret it?

 Here are some rules my husband and I use for ourselves.  

(1) NO ONE IS AS CAREFUL WITH MONEY AS YOU ARE.

In other words, don't just hand over your bank account to a financial advisor and expect great returns.  You gotta be on top of your own business.

(2) Nothing is better than experience.  

You can listen to all the podcasts and read all the forum advice out there.  In the end, you gotta get your feet wet.  That's how you learn for real.

(3) Biggerpockets is great, but developing your own strategy that works for you is better.

We developed our own strategy that isn't in line with many people here at biggerpockets and our worst performing rental property has a net ROI of 32%. By net, I mean we only use 60% of the total.

(4) Always be wary of people approaching you with big promises.

We have found that once they know you have money and are in the market to invest, the conmen and dredges of society will gravitate toward you looking to con you out of your money.  You fight this by being on top of your business instead of relying on other people.  

(5) A flop is not the end of the world.

Don't keep crying over past failure.  Deal with the failure head-on and move on from there.  Learn from it.  

(6) Have I mentioned NO ONE IS AS CAREFUL WITH YOUR MONEY AS YOU?

There is no official way to calculate your ROI. In other words, everybody's is different.

that said, this is what I use. 

($1450/mo x 0.6 x 12mo) / $120000 x 100% = 8.7% 

It's not bad. However, knowing the inhabitants of this place, expect lots of disagreements with my formula. 

Need Help Naming, LLC looks fine to me :-p

my husband and I never changed our last names when we got married. Our LLC is a clever combo of our last names. We also intend on changing both our last names to it.