All Forum Posts by: Rich Lopes

@Brandon Hall, Thanks but still not clear if the Heloc against primary residence can be used for business/rental use and the interest can still be deductible? In @Remone R.'s case, I presumed he is living in one of the 4-unit since he is referring to fha but probably not anymore as his primary residence.

What about Heloc against an existing rental property? Can the Heloc be used for any other purpose other than business or buying other rental property?

@Remone R., more info - https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law

Not sure if this topic is been discussed in the forum yet but I just learned HELOC interest is no longer tax deductible unless it is used for improvement of the property against which the heloc is borrowed so keep in mind before you go HELOC route.

@James Kandasamy, Awesome! I heard you on 2 podcast even before this article. Very nice. 

Question: When you do refinance and take money out, wouldn't you have to pay the interest on that Money on a recurring basis - since this more or less HELOC? If so, what is the %age of that interest? Are the investors who were paid back going to pay the interest on a recurring basis or you as a syndicator going to do that?

If not, why not?

Also, what would happen when the interest rates rise in the above scenario if it is yes..

Sorry, too many questions but this is been my question for any syndicator out there who keeps talking about pulling money after force appreciation.

@Christy Philippoff, it's a people business so start off with them with their current rent but be honest and tell them it would go up by $100 in about a year. That way it's up to them to decide whether to rent with you or someone else. Also, before you do that make sure you have couple of good tenants lined up..if not then you don't have much choice. Both Dad & daughter can live happily ever after :)

@Jan H., based on the price and cap rate and the overall area it seem more like B or C type of areas than a "D". Yes, I wouldn't want to buy in those areas but thanks for bringing up that point.

@Jeff Zimmerman, I have been thinking on those lines. 

@Brad Sumrok, Thanks! Your feedback means a lot... I have heard some great success stories about your students on Old Capitol Podcast.  I sure would like to be in Dallas market  or in one of those growth markets and will definitely reach out to you.. :)

@Bonnie Low, This is close to Stockton to be exact. Those rents are probably low and the comps show almost $200 - $300 more than that, but without value add I don't see a reason why the current/future tenants would want to pay more. But that's just my opinion - may be they would. 

@Andrew Johnson @Chris Seveney, right, I haven't talk to many lenders but I spoke to WF few months back and they said they should be able to do 7 yr fixed with 30 yr Amortization. I also did a quick google search and I came across at least 2 who are saying they do 30 yr amortization. One is a local Fremont based and one seems to be the national lender. 

@Matt R., Thanks! That chart is very interesting, and I have looked at it before but you can't predict much from that, as you know every bull market is different.

Jason Bott , could you please send some my way if you don't mind? I have run into similar scenario in mid-west but not in my home state. They told me labor cost is more in mid-west than in CA - at which point I couldn't stop myself from pulling my hairs.

@Chris Seveney, it's based on a 30% year with 5% which is reasonable I guess. Not much of an yard but a driveway of course which might need some work. 

@Kurt Jones, Thanks! :) Certainly, I been trying to run away each time but keeps getting pulled back.. 

@Anthony Dooley, I agree but at the height of this market, expecting an appreciation is like playing a poker with a blind fold. I agree on the Capex, but we can't go with an expectation that it's going to be all fine. I have separate line item for ad-hoc repairs & maintenance.

@Jay Hinrichs, It's actually N Central Valley.. Now you can tell what city :) Most Central valley cities command only so much rent. There's not much upside IMHO

@Andrew Johnson, it's certainly not so close to Bay Area.. hence can't triple the rents.. Those deals are long gone. Yes, appreciation is not something I want to count on unless it's pure Bay Area play but even that is speculation in today's market.

@Marcy Moyer, Sacramento, Chico or Stockton are still recovering from last housing crash so going there with an expectation of appreciation or stability is like playing with a fire.. wouldn't you agree? I would say you just lucked out on your 200k investments - aren't most people who bought before the tech boom and some after. Yes, I have neighbors who are in the same boat as you and even my own primary home (now a rental) bought right before the crash has more than1M in equity. So I agree on your points.. but I am looking for Cash flow.

@Jeff Zimmerman, Good point, but what if we get hit with one of those capex items before the timeline? It's a "C" class property which has potential for CapEx but little on the rent upside.

Thanks all for chiming in. Lot of great points. Appreciate your time!