All Forum Posts by: Tim Sipowicz

@Henry Lazerow understood on the CAPEX thoughts, it makes sense to just do a couple hundred flat rate and not base it on price of home with the %. Now with the equity in my home, I prolly could use it elsewhere for maybe a better return but then with selling, that leaves us with trying to buy a new primary residence along with getting an investment property because we wouldn't move into a multi and house hack. So my point of view is, get a bigger house for my family right now, use my house right now to break into REI since I'm familiar with the property and that may make it easier, and slowly get the loan paid down on it. I know the cashflow isn't the strongest but at least my loan will be being paid down while I get my family into a larger home. If I open up a HELOC right now, are there terms to when I have to use it or can I open it and use it need be in the future.

@Jonathan Klemm I also talked to my lender about getting a better rate and he doesn’t think I can gain enough there in order to lower my payments monthly. Maybe I can shop around though? 

thanks @Jonathan Klemm, those are my thoughts as well of it being a good way to get into REI. It doesn't cash flow great, it's $191 but that's including CAPEX and repairs which I imagine will be low but I'm still going to account for. ROI is at 45% though at the rent of $1600.

@Joey Nakayama I apologize for any confusion to what you said about the 4.5% but how does that differ from the ROI I am getting when I run the numbers cause rent depending, the ROI is coming back at 30%

Thanks for commenting @Joey Nakayama. I want to build my portfolio rather quickly, or at least set myself up for the best scenario to do so. My next primary residence will be treated the same as my first. It will be an upgrade in size for us but then after a year or two, move on and use it as a rental as well. I'm not going to keep moving my family around tho so after the second, we will get situated to where we want to end up with the third. To address your points tho, I may be able to invest that 60k Equity for an investment and down payment but that leaves us with I assume just the strategy to house hack and right now, we don't want to downgrade space into a multi family if that makes sense. I know my property well obviously and what I have fixed on it as well as it being gutted and rehabbed six years ago. I believe it will be a good jumping off point for me to use as my first. Possibly use a HELOC from this current home in the future for down payments on more properties? I don't know how quickly this plan will build my portfolio so if you see any flaws, please let me know.

@Henry Lazerow I also factored in 5% for vacancy. 

@Henry Lazerow I've ran the numbers for 7% for CAPEX based on what I've already replaced in the house and I what I know about the other major components and I think that's relatively fair. I Do appreciate your more realistic viewpoint on the strategy though, thanks

Thanks @Joseph Cacciapaglia. I’m going to talk to my lender and see if a refinance would save me any money in terms of a lower rate, not exactly sure just yet if I’ll be pulling money out, we’ll see what options we are dealt. This second home will eventually be an investment property but you make a great point, still have to have that balance. 

@John Clark also I will be self managing the property so there will be no added expense there

@John Clark thanks for commenting. Running the numbers with the lower end of that rent would be at $1500, the house would cashflow $120 with an ROI of 29%. My agent and I believe will be able to get $1600 a month for rent bringing the cash flow up to $207 with an ROI of 49%. That is including still putting money away for repairs, CAPEX, and vacancy. I definitely understand your point about still putting money away and I tend to do so.