All Forum Posts by: Russell Gronsky

@Bobby Narinov, sorry for your bad experience but this is something the RE investing community doesn't talk about much. The fact of the matter is, the bigger you are, the more respect you command. So your best solution to this kind of issue is to get more units. 

Yes, you can find a good, honest PM who will treat your 1 rental with the respect it deserves. However, you'll find a lot more PM's who will treat your properties with respect when you have 5, 8, 15 or more units with them. This business is similar to any other...the little guy gets pushed around until he either quits or finds a way to become the big guy.

@Jack Moran, the answer to your question is yes, you can do a cash out...as long as your DTI and credit score fits the bank's criteria. However, just like @David Cruise said, banks don't like loans that small for Real Estate. You might want to try a personal loan from a bank or one of those 3rd party lenders that spam your mail box, rather than a cash out. Interest rate will be higher but at that low of an amount, $28,000, it shouldn't raise your costs too much, just make sure you know what the seasoning length of the loan is (if there is a seasoning period at all).

What about Freddie's small balance loans? Not sure if they have impounds but last I looked (5 months ago) their terms were quite favorable. They say small commercial properties (5+ units) but I wonder if grouping a bunch of SFRs would check the box?

If It's vacant, this is probably 1 or more of 4 things:

1. water theft

2. squatters

3. leaking toilet/faucet that was left on by a perspective tenant viewing the property.

4. Malfunctioning meter.

You can rule out #3 by asking your PM if there have been any showings of the property around the dates of the high water usage. Rule out #4 with a call to the water provider. 

The other 2 are more tricky. Perhaps getting a home security system will prevent future "abnormalities"? Otherwise....sorry for your loss. It's the cost of doing business. 

I would definitely have the PM go check the house to make sure there aren't squatters in it. If they stay in the house for over 30 days (this law varies by state), you will have a MUCH bigger problem than a high water bill.

Why not buy into a small multi-family and save all the monthly profit for 12 months, then take the entire amount and pay it towards the debts, then repeat again the next year? You'd own an investment property, build equity, get tax breaks and pay down your personal debts.

@Nikki Berg, without pictures or more info, it sounds like the new addition is settling. You are right where the slope up 1/4 of an inch and then a drop of 1/2 inch is where the original foundation line is. In fact, the high point the slopes up and down created, is where the foundation is holding it up (most likely). Normally, it isn't a big deal if the addition settles and the slope isn't bad but if it is that bad, you'll need to fix the foundation. This isn't cheap to do. Sorry.

My assessment might be incorrect as I am making an educated guess based off the information you gave. The one thing that bothers me is you said the basement is completely level. Is it really? I would investigate the basement very closely, in the same area as where you have the slope up and slope down on the above level. I'm betting you'll find a similar high point, just maybe not a drastic slope like in the kitchen. 

If there really isn't a high point in the basement, then my guess is probably wrong and it might be a joist issue. Good luck.

The DOW just rallied 1,000+ points today. We are surely back into a booming economy again, right ?!?!?! No more recession concerns? hahahahahahahaha

@Account Closed, If you buy that $100k investment property in all cash from the HELOC then yes, as soon as the deed is recorded, you can find a lender to do a cash out refi. However, the cash out will range 75-85% LTV of the property, so you may not get all your HELOC money back out of the investment, unless the appraisal suddenly comes back significantly higher than when you bought it. That is highly unlikely if you haven't done any work to the property. Also, some lenders will go to 90-95% LTV but the rates become exponentially higher and probably don't make sense to do.

Now, if you had to use a mortgage of some kind to cover some of the cost of buying that 100K investment property because your HELOC didn't cover al the costs for some reason (very possible on property #2 in your strategy if you can't pull the full HELOC amount out of house #1 on the refi), then the mortgage may have a 6 month or even a 1-year seasoning period in which you cannot refi out of that loan. You'll have to verify with the lender if/when the situation comes up. Also, you might be able to negotiate out the seasoning period, if the lender tries to stick one in.

And you are correct, you can use the HELOC to go buy another property, once you pull your money out with a cash out refi. And yes, cash is always stronger than a pre-approval letter when making offers.

@Andy Gross I agree with @Jim K. on this one. doing a live-in renovation is vastly different than renovations on a timeline where you are needing people to move in quickly to help offset mounting costs. When I was learning renovations it was on my primary residence, while I was living in it. I had a friend who has renovated and flipped houses before guide me through the process. 

Did I make mistakes? Yup. lots of them. But since it was just me living in the place, It's okay if I slept in my living room for 3-4 weeks while I figured it out. It was okay if I only had sub-floors in for a few weeks while I took estimates from 10 contractors on what it would cost to do the flooring in the house. I could demo the entire kitchen and eat take out for 2 weeks while I waited for the cabinets to arrive and get installed. If I had a work trip or a vacation I wanted to take, I'd pause renovations and go do that and I was always able to ask my friend to come over to help me.

Those are luxuries you don't have when you are renovating something on a timeline to get renters in ASAP because you have a loan note to pay. Two very different things.

@Charlie MacPherson, those sounds like incredible deals. I'm liquidating all my holdings and jumping into this ocean of opportunity immediately!!!! hahahahahaha