All Forum Posts by: Spencer Haus

To buy a tax lien? I'm pretty sure you can't do that with California real estate.

Max, I think you may be neglecting taxes, insurance and PMI in your mortgage payment calculation. There are online calculators that can tell you what your PMI could be. I think those three impounds could be close to $1,000 for this house. The other things to consider are capital expenditures, property management, ongoing maintenance, vacancies, & utilities. All those could be close to $2,000. I would factor all those costs in and formulate an offer based on that. I don't think you can pay asking price and make any money on this deal. Good luck!

Thanks for the tips Chris.  It would be pretty scary to have a 1st mortgage on the investment and a balance on the heloc.  My goal would be to purchase a property 100% with the heloc funds and use what's leftover or cash to do the repairs, forcing up the value of the property.  

Regarding PITI funds, I would probably want more than 6 months earmarked depending on the condition and age of the property. A bad A/C would gobble that up quick.

Chris, In your experience what would be the maximum debt to income ratio (including all debts) that might be allowed in order to refinance an investment property with a 1st mortgage?  Also how do rents play in to the income side of the ratio?  I've heard that banks typically consider only 80% of rents as income.

Thanks all for the welcome and great info Jerry!  That's exactly the reason I'm here, to absorb some knowledge.

I'm primarily interested in a HELOC for the flexibility of having cash on hand when I find the deal. Then, I imagine I'll pull out the equity of the investment property to pay off and free up the HELOC funds.

I'm still learning the ins & outs of real estate investing and excited to get in to my first deal.  I plan to use the equity I've built up in my primary residence to finance the deal.  Now all I need is the deal!  Easier said than done I know :)