All Forum Posts by: Scott Wolf

Congrats @Drew Poniewaz!  Any deeper insight into the spread you kept, and what you're making on the note?

@Jordan Levine, I'm not sure, you can search for him here or on google.

@DelVaughn A., a 1031 exchange would help your situation.  If you like the property, you can also cash-out refinance, which is a non-taxable event.

@Dwight Cook, I suggest you start looking for partners, or something you can house hack to a low downpayment mortgage option.  10k/60k is only 16.6%, which doesn't satisfy any banks 20% dp requirement.   If it is a great deal, you should be able to find investors.

@Michael Acheampong, that rate seems a bit high.  How many banks did you speak with?  I got 25% down with a 4.25 rate two years ago in a higher interest rate environment.  As for the points buy down, it's definitely worth it on what I'm assuming will be a long term hold.

@Waylan Liu, your first sentence says you're looking to grow your portfolio, so grow it.  You're sitting on $308k of tappable equity (70% of 440k, which is conservatively the estimate if you did a cash-out refi on both properties.) 

ROE is tough, because it is a changing calculation.  When you have a mortgage on a property, you're constantly building up your equity position.  That being said, your 6% ROE is low, which is why most RE investors love leverage.

Let's look at an example of equity in action. You buy a rental home for $100,000 with $20,000 down. The year of the purchase, you see that it is worth $100,000, but you only owe $80,000, as you have that $20,000 down payment as equity. Let's say that your annual positive cash flow is $3,600, or $300 per month over mortgage and expenses. Your ROE is $3,600 / $20,000, or 0.18 = 18% Return on Equity.

So while in the future, having all your properties paid off, and have a ROE of 6% on $5MM in RE may be amazing($300K income), right now, this untapped equity can really help you reach your goal of expanding your portfolio.

When you bought the property, you got an Owner's Policy, which protects you, and a Lender's Policy to protect the lender.  During a refinance, you only pay for a new Lender's Policy, as your Owner's Policy will remain in effect until you sell the property to another owner. 

PM me @Joshua Zuniga

@Tesho Akindele a title company should be able to provide you a quote.

@Vin Soando, you only need to match or exceed the sale price, there is no restriction on maintaining financing ratio.  Happy to put you in touch with my 1031 team.