All Forum Posts by: Ryan Ingram

Great work John K!

Subscribed :) Looking forward to seeing your progress! Congrats on taking action and getting into the game. Your kids will be super appreciative.

Great post and great question. I've spent tons of time trying to figure out the differences between these two and weighing the pros and cons as well. 

As most things in real estate investing, there is no right or wrong...it is situational and comes down to your intents and personal preference. 

1. HELOC - This is primarily short term money. If this is a commercial line of credit, it is likely renewable on an annual basis. Which means, the bank reassesses your situation, plan, performance, financials, and then redetermines whether or not they want to continue extending this line of credit to you. If they decide they do not want to, they can call the note and request the full loan balance to be paid off OR work with you to convert it to a long term mortgage....like the cash out refinance option. The main benefit here, is that the payments are interest only and anything above that is applied to principal.

2. Cash out refinance - I personally think that cash out refinance with a fixed rate on a long term mortgage (20-30 years) headed into uncertain times is a POWERFUL place to be. Historically speaking, (from what I've been told) banks don't tend to call performing mortgages in the midst of a crisis. So, if you can recapture the equity and keep the money on the sidelines, I think you're going to be perfectly poised to take advantage of any and every opportunity that comes as a result to this crisis. 

One of the things that I did specifically to brace for any and all negative blowback from this is refinance a few properties we owned out right in order to park the money. 

Again, great question and I hope that is helpful!

Hey Travis, this is a really complex question of which their are many variables. 

I think the way you posed the question, definitely you'll have to pay taxes. 

But, I think once you factor in all of the things you can write off, including depreciation, you won't be near that $10,000. I think when we sit back and analyze properties, we say things in our heads like "this profits $300 per month after all expenses" but in reality, that isn't exactly true. I think it is definitely true if you forecast the performance of the property out 10-30 years. But, our pretty capex, repairs/maintenance, vacancy percentages don't actually correspond to real financials. The first few months of owning the property, its possible to have a repair or capex item that eats up your budgeted percentages for the next 2-3 years. 

I'm not completely sure that it is possible to both grow your portfolio and show true profit at the same time, unless you're not taking advantage of the full tax benefits available to you. 

Thanks for the confirmation, @Christian Nachtrieb! Each time I have this situation I vow to never accept any tenants with pets. But...usually I break this vow as soon as I get an application from another tenant with pets...

Latasha, this is fantastic! 

Thanks so much for sharing all of that, making great decisions for the future generations of your family, and putting in the time to research! 

I'm currently in the process of teaching my son all he can handle about real estate investing and money in general (he is currently 3) I'd be happy to help anyway I can or if you have any other questions. 

But, as far as this one goes: 

1. I've invested with Fundrise in the past, and as far as investing with financial vehicles/instruments apart from real properties...I really enjoyed it. I don't have anything negative to say about them. But, as you have already alluded to in your post...it is hard to beat the returns and benefits from having your own properties. 

2. REITs are also a great investment tool that is similar to Fundrise but probably not as user friendly. I was really impressed with Fundrise's website and how often they updated their metrics on your account. The only ticker that I have invested in and researched is LADR. They were very stable prior to the pandemic, and it looks like they are starting to climb back up. In REITs from my limited understanding and research, they most likely won't increase much in value, but they will offer dividends that are pretty great. These are generally paid out quarterly. 

3. I have never met with nor had a personal conversation with Mr. Robert Kiyosaki, but I consider him to be a mentor of mine. I have never paid for any of his courses, webinars, etc. However, I have read most of his books and consumed all of his free content. I highly recommend him for anyone that, like me, come from the blue collar or impoverished way of thinking. He really helped me unlearn and break through a lot of the inaccurate or just flat out incorrect ways of thinking about money and material things that are common with lower income families (again, like my family's past). 

Looking forward to hearing and learning more about you and cheering you on in your journey!

Hey Andrew, my personal opinion is that you should not refinance. But, this is a question where there are an equal amount of pros and cons on both sides. 

I'd keep this option in my back pocket...but, since it isn't urgent...I would wait for a bit and let appreciation do its thing. This time next year you'd likely be able to do the same thing and keep your equity. 

Hey Ethan, I can totally empathize with this. I have one property that has been vacant for so long due to animal smells. The only thing I've had a moderate amount of success with is utilizing an O3 machine and using microban and if it is hardwood, covering it with another flooring or carpet. 

Since you're talking about the kitchen...I don't think carpet is a great idea. 

A lot of people will say not to use an 03 machine and the science on it varies...it can't be used in an occupied area...and you have to air it out for a bit after you use it...but, I have had good results from them. I will run the machine on the vacant unit for a while, on this most recent unit that is still vacant...I let it run for 3 weeks. 

For sure, great work again on the house hack at 26...you should be super proud. Good luck getting that unit rented out, hopefully the city eases up once the covid fully passes.

Great work @Kahleah Manigault! The first one is always the hardest. Out of curiosity, are you familiar with Doug Depte? I think he is out of Philly and does a lot of teaching/YouTube videos about his investing.