All Forum Posts by: Travis Beehler

Hey there Ryan!

I wouldn't necessarily go this route for a few reasons.  There's not a lot of details, so I'm going to make some assumptions.

First off, your debt to income ratios will rise, and sooner or later, you'll run into not being able to buy more rentals. But let's assume for a moment, your numbers are correct. On a $200k house, you'd need roughly $40k for the down payment, then on top of that, closing costs, etc. Assuming you've taken all that into account, you're netting $3,600 a year, on a $40k+ investment. Around 9% COC return. That's ok, but not great in my eyes for the amount invested.

Now, that being said, if you were to use your HELOC for a property you were going to apply the BRRR method to, then by all means go for it!

Now, please don't let me discourage you from going this route.  This may very well work well for you, however your rate or return is a wee low for my tastes.

Care to share more details in this deal?  Are you putting money away for repairs? Do you have a property manager? Does this property need repairs anytime soon?

By all means though, an excellent question!

Kyle is absolutely right. I have one property I'm making more than 50% COC, but my God is it ever high drama. I've got another property that's making about 11% COC, and there's zero drama.

 I would start here:

http://www.city-data.com/

Hi Jorge!

I guess my first question would be: How much of a decline in population?  Is this a dip that's going to rebound?  Is this because jobs are leaving like crazy?

It could be a slump the city is in, but that may mean that the rentals are now "on sale".

So, to answer your question, no it wouldn't prevent me from investing, I'd just want to know more info before I made that decision.

 Thanks Iverem!

Thanks!  I'll take a look!

Hi Latasha,

Check out the Education section at the top of your screen. That'll be able to help explain things better. But, quick thing is that you'll be able to go to a lender, get a 75% LTV loan, and they will cut you a check for $31,500 (Before closing costs, taxes, etc.). Take that money, and go buy another $23,000 house if you can!

I'm really boiling it down here, so I would highly suggest going to the Education section first.

b2r financing. 

 Hooray!  I'm helpful! :)  Ha!  Have a good day!

Hi Nick!

I guess it would really matter on what you can afford.  Since this is your first property, could you afford the mortgage and all related expenses if the property were to sit empty for say 3 months on a nicer place?  If not, then go the cheaper route, especially since this is your first property, and you will make mistakes.  Everyone does, myself included, on their first property.  With a nicer place, you get a better quality tenant and higher rents, though.

I guess my other question would be:  How much lower priced are we talking?