Thread: Exponential Return on Your Investment

Originally Posted by Gilligan

Pyriel,
Have your considered new construction. Around here you can build a new house for less money that buying one that is 10 to 20 years old. I’ve seen a lot of apartment complexes going up that are 4 plexes so they can get by with the residential loan and they don’t need the 20% down that a commercial loan requires. Does GHURA have a long list of people who need housing?

OMG. Its been awhile since i last checked this thread. Sorry for not writing back any sooner. I am currently talking with a friend right now. Plan is to subdivide a lot and build several houses on smaller lots.

GHURA do have a long waiting list for people trying to get into to the program. One thing i noticed here is that GHURA tenant likes to stay in a single residential house. This is what I am concentrating on right now because once you get them to stay there for a year, they tend to stay there forever;-)

P

Pyriel and all-

Looking for some thoughts and advice on my investment properties. As mentioned previously, I have a rental condo with 1st and 2nd mortgages totaling 120K. I have put in a total of 15K for ALL expenses since I bought it. Last month it was appraised at 165K. I took out the 2nd (HELOC) and paid ALL other debts and increased my cash flow by several undred/month. However, because of the second, it has negative cash flow of 250/month (not including tax benefits).

Yesterday I setted on another property for 134900 and had already put down 14000 (from HELOC on primary residence). It cost me only 1280 out of pocket at settlement because I bought it with a HELOC on the property so there were no prepaids. I never heard of this before- the rate is higher but it is for folks who want to flip the property and have less out of pocket when purchasing. It was appraised at 158K.

In any case, I intended to flip it and make a quick 10K profit. I was going to apply the 10K to the 2nd mortgage on the above rental, put that one up for sale and do a 1031 on a larger property I am having built.

However, I was approached by someone who wants to rent the unit. I would need to put more $$$ into it (HELOC $$$) and refi to make positive cash flow. There is already decent equity in the propety.

So, the question is, do I keep it, refi, and let it ride, or apply to the other property and go with the initial plan?

As far as the larger property, I could probably buy down a loan to make the payments low enough for positive rental/cash flow, and then I would have this property and the larger one.

Looking forward to comments...

Originally Posted by colonialmike

Pyriel and all-

Looking for some thoughts and advice on my investment properties. As mentioned previously, I have a rental condo with 1st and 2nd mortgages totaling 120K. I have put in a total of 15K for ALL expenses since I bought it. Last month it was appraised at 165K. I took out the 2nd (HELOC) and paid ALL other debts and increased my cash flow by several undred/month. However, because of the second, it has negative cash flow of 250/month (not including tax benefits).

Yesterday I setted on another property for 134900 and had already put down 14000 (from HELOC on primary residence). It cost me only 1280 out of pocket at settlement because I bought it with a HELOC on the property so there were no prepaids. I never heard of this before- the rate is higher but it is for folks who want to flip the property and have less out of pocket when purchasing. It was appraised at 158K.

In any case, I intended to flip it and make a quick 10K profit. I was going to apply the 10K to the 2nd mortgage on the above rental, put that one up for sale and do a 1031 on a larger property I am having built.

However, I was approached by someone who wants to rent the unit. I would need to put more $$$ into it (HELOC $$$) and refi to make positive cash flow. There is already decent equity in the propety.

So, the question is, do I keep it, refi, and let it ride, or apply to the other property and go with the initial plan?

As far as the larger property, I could probably buy down a loan to make the payments low enough for positive rental/cash flow, and then I would have this property and the larger one.

Looking forward to comments...

CM,
Although I am not against flipping houses, I would probably rent this one out as long as there was a positive cash flow and I had a renter that would take care of the place and paid his rent on time. By the time the renter paid the mortgage off for you the house would probably be worth 10 times what you bought it for.