All Forum Posts by: Frankie Woods
Frankie Woods has started 29 posts and replied 1243 times.
Post: Percentage of Net Worth in Retirement Funds
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
I shoot for a 50-50 split, but obviously there are caps on contributions to your 401k and IRA which will limit its growth potential and likely skew your networth towards R.E. if you can get creative [unless of course you are buying property in a SDIRA.
Post: Puerto Rico R.E. recommendations
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
@Kim D. excellent info, thank you! I'll check out the links. The neighborhoods you mentioned line up to what my partners are seeing. I'm super excited to test the market!
Post: Having negative cash flow to pay off mortgage faster
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
Don't trap yourself with a 5 year term. Get a 30 year and pay it off early if you so desire. Regarding whether it's a good play depends largely on your goals. If you are trying to scale, then no. If you are trying to minimize risk, then yes.
Post: Proof of Funds - Personal Loan From Family Member
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
Your escrow company should be able to provide the seller with the information they need using your mother's bank statements.
Post: Ideal rate of return for investors
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
@hai loc gives great advice. The rate of return requirement will vary by lender. it just comes down to having a conversation and figuring out how to make the deal a win win.
Post: Hello from Albuquerque NM
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
Hiya Gina! Welcome to the area! I've had trouble finding MFRs myself as you described. But I'm on the hunt!
Post: When is gift money no longer a gift?
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
Its typically 2+ months sitting in your account.
Post: Fannie Mae vs Portfolio Loan
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
If it's a sole proprietorship LLC taxes should be the same either way. I'm not sure I understand the "financial" question. I personally chose to max my 10 loans with conventional banks at better rates before doing commercial type loans. (I.e., your second example)
Post: Where to Live Once You Achieve Financial Independence?
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
Denver! Or maybe Bend, Oregan
Post: HELOC or Traditional Loan for first property?
- Investor
- Arlington, VA
- Posts 1,285
- Votes 491
Originally posted by @Jason Ngo:
Originally posted by @Frankie Woods:
I'm in a similar situation. I love the diversification that stocks provide so I try to avoid touching that pot of money if possible. I love the HELOC as a short term solution to acquiring property before refinancing it out to rinse and repeat after seasoning. As others have stated, it's generally a better solution than hard money or private money. And its a way to leverage the equity in your home to generate a higher return (with greater, but manageable risk).
At the end of the day, it's all about the ROI you except to generate in all your buckets, and the risk you're willing to accept. I'm all about the HELOC though!
Thank you for the advice Frankie! I was just really concerned about having the heloc AND the conventional loan and paying double interest. This is my first investment and I'm trying to get everything ready. I must be looking at this all wrong since no one else seems to mind paying interest on both. Can you help me understand and point me how to rinse and repeat "after seasoning"?
Investors don't mind paying double interest if the numbers still work for them. I can still generate a 10% CoC return paying double in most circumstances because the deals I find are pretty good. However, I've made a long-term play were I like at my IRR over say a one to five year period which includes a sell or refinance and will usually do quite well even if the numbers are lousy for say the first 6 - 12 months.
"Seasoning" is just illustrating that the property is performing (e.g., being rented and covering your costs). Conventional lenders want to see this before they will allow you to refinance. The refinance allows you to pull money out of the property and pay off your HELOC, investors, etc. or lets you put that capital into another deal.