All Forum Posts by: Justin B.

The meeting for Feb has been set an details delivered via e-mail.  If you did NOT get an e-mail (I just sent it a few minutes ago), check junk folder, etc or shoot me your e-mail if you've never given it to me and I'll forward over the details.

A lot of good advice here, but what about looking at it this way?  Let's assume your real estate income is greater than your expenses and you like your day job.  Do you need to quit in order to expand your real estate?  Or can you keep going doing it part time (outside of your 9-5) without killing yourself?

If you can keep doing it part time and you like your day job, why quit?  Just view your day job salary as extra income to expand your real estate empire that much faster.  Once you get to the point where it becomes too diificult to do both, then quit.

Our first property was in 2010 and our second in 2012.  Our first one would be coming up in August of this year but we re-financed it last year.  We realized we had enough equity to refi and pull out every $ we had put in (plus a couple of K) before the 5-year mark.  For our remaining properties, we're already looking at refinancing the one we bought in 2012 this year (and pulling out at least our down payment) and our next group isn't due until 2018.  So we technically haven't hit the 5-year mark yet.  However because we've already re-financed one, it's the same thing.  We had no pre-payment penalties.  Almost no bank will hit you with a penalty at the end of your arm.  They fully expect you to refi it again at the end of your arm at whatever the market interest rates are at the time.  In fact, our refi was simple.  The bank didn't even require a new appraisal, they just did an in house eval and used that #.  It only cost us like $300 to refi and the bank even rolled that into the loan too.  So we refi'd, pulled our original down payment + $2k out in cash, and are back on the 5-year clock.  Fortunately the interest rates didn't changed much and our new loan is .25% below our original.

For the short direct answer.  No, there shouldn't be a pre-payment penalty (if there is, run from that bank).  Yes, they fully expect you to refi at the 5-year mark or even before.  Yes, it's easy to just keep doing it until you no longer own that property.

We pulled out money and kept the payment the same, but you don't have to pull out money and your payment will go down. The banks love arms now because let's face it, interest rates aren't going down. They are banking on the interest rates going up and they know they most likely get to raise them if that's the case in 5 years instead of waiting 20. After 5 years, the amount you owe on the morgage is less and the rent you are charging should have gone up several times so it really shouldn't be an issue even with an interest hike at the end of the ARM. Worst case even with a big interest hike, with rent raises and mortgage paydown over those 5 years, your cash flow would pretty much be the same.

I have 9 SFR's and all 9 properties are "commercial loans" with a 5-year call and amortized over 20 years. We just refinance every 5 years (usually sooner to pull our initial investment out and then some if we're lucky). Of course our goal is to be completely out of SFR's and in MFR's in and Commercial property in less than 10 years anyway. Since they are all in my LLC's name, we don't qualify for the typical residential ones. I doubt you'll find a commercial loan for a residential property that doesn't have a 5 or 7 year call. They might be out there, but you'll probably pay for it in points and interest rate.

Thanks guys.  E-mail coming in just a few days with location.  I've got 14 people in all interested which is great.  I figured we'd have 5 and was hoping for 10, so 14 is great.  Again, our target is the first Tuesday of every month at 8pm.  I'll be picking a local restaurant for the first one.  If we get bigger we can always look at different venues, but that's something we can discus when we meet up.  I look forward to meeting everyone!

@John Marshall 

@Brett McCurdy 

@CM Williams 

I still need your e-mails :)

Yep, still planning on it.  The wife just had knee surgery so our planning our first meeting for the first Tuesday in Feb at 8pm.  Send me your e-mail if you haven't already and I'll let everyone know the place in just a few days.

Just get commercial loans.  There is no "limit".  If the only way you can make any money is buy getting 30-year terms then your deals aren't very good to start with.

I'm getting commercial loans in the 5-6% range amortized over 20-yrs that cash flow great (These are all SFR's). You should be able to make your target cash flow at these terms or the deal isn't good enough.

So I'd say get to your 10, enjoy the fact that you were able to get 10 loans at the 30-yr mark, and then just go commercial loans from here on out :)

@Marc M. Yea, I'm just waiting until the holidays pass.  Lots going on plus the family (including me) all got sick so look for something next week.  I've got your e-mail. and I'll post here too.

When this thread is over, you should print it all out and get it put in a frame for all to see! :)