points

Congratulations on your duplex purchase!
If this is your first property, and since you paid cash, I would think you could easily cash-out already at a decent rate for investment property. Have you checked with the lender you got your HELOC through? See what they have available. You could then repeat the process you just used to continue investing. I was able to do this 3 or 4 times in a row before they started to question our Debt to Income Ratio, thus pushing us to go with business loans.

Again, Congratulations and best of luck on your future REI!!!!

Rina

Hi Rina,

Thanks! It is our first and I am doing it long distance. I have a super team in place and want to cash out to pay back HELOC with loan and repeat as soon as that transaction is complete.

I talked to two loan officers so far. I haven't had them run my reports yet but do know that Well's Fargo will allow up to 6 properties before they make you go commercial. I have spent some phone time with the two and need to know it will be a good fit before proceeding with the credit checks, etc. Once I narrow it down to two I will let them run it. I haven't thought about asking a loan officer at the bank we got our HELOC at. That is a great idea. Thank you.

Any thoughts on points or Money to time value?

Sincerely,
Angie

I haven't had to deal with that yet. I had such a great gal to work with at our local bank that we just kept going until she ran out of leads for lenders. For every loan I got through the bank, although they did sell the mortgages afterward, the bank I went through actually paid the points FOR us in order to keep us as a returning customer. This worked out great for both of us. The title companies were actually very surprised to see the bank willing to do that, but hey it's worth asking about. Might save you some bucks in the long run.

Best wishes and I am very impressed with your long-distance REI.

Rina

Thanks I am totally diggin it! My goal is to get our passive income past our expenses. Then we can retire early, with having a team in place and management company it will allow us the freedom we are working towards!...Thanks for your suggestion Rina I will call my lady at the bank who we got our HELOC from in the morning!

Warm regards,

Angie

Congratulations on your deal, way to go! Let me ask you if you have an LLC? If not I would suggest getting one and building up your business credit to do more deals instead of personal credit. You will get more money at a better rate than a mortgage or heloc. Plus, your properties are protected because they're in your LLC not your personal name. So you can be working on that while you do another deal. Hope this helps!
God bless you,

Great suggestion. Which makes me think of another question.
Because personal mortgages have a much lower interest rate than investment loans, would it be wise to finance a property with a personal mortgage and then transfer title to the LLC. I am needing to look into this myself, as I have only done it so far with properties having no lien against them. I was told by the attorney (or it may have been the accountant) that the lienholder probably wouldn't care as long as the LLC was in fact owned by the same person on the title of the property. Any thoughts on this? I think there was a discussion a couple of months ago that the guys had about this. I MAY try to find it.

Rina

I'm not sure about getting a personal mortgage and transferring the title to the LLC. Probably a question for your accountant. But why wouldn't you use a business line of credit instead? Some are lending @ 0% for the first year! Can't get a better rate than that!!! Just a suggestion.

Hi,

Thanks for the congrats! Yes, I am working on my LLC and it will be done at the end of the month, thanks. As for taking a cash out 1st mortgage it has to be in my name not the LLC according to all the lenders I've spoke to. Once the mortgage is in place then I will do a quit claim and put the duplex in my LLC name. The LLC is what I am using to set up my business account to so that the rents go ito it to pay for bills fromt he property. Thanks for your input.

Sincerely,
Angie

Hmmm... but what does it go up to after that?
Would be GREAT for flipping! I wonder about holding (rentals).
Keep us up on what you find out about the business stuff, ok Lena?

Thanks, sis,

Rina

I sure will sister, you know I've got your back girl... LOL!

Hello Angie,
Sounds like you got the same advice as I did about the deeds to the LLC after financing in personal name. I am doing that with existing properties right now.
The 0% interest on a business line of credit is really interesting. Somewhere on this site I read about how to create credit for your LLC. Does anybody remember where it is?
Your talk about having your team and management people in place has challenged me to get more organized in that area. Thanks!
Be blessed,
Jan

Try this link: http://www.deangraziosi.com/node/6777

I just want to say that I am proud of you. I know you battled some obstacles on your way to buying your first investment property. You have just done something that most investors will never do-you bought a property from a long distance. Keep in mind that the lessons learned by doing this are better than the actual properties. Once you have mastered this you can buy anywhere in the country. Now everyone knows your serious and things should get easier (not easy). Now go out and get your refi done and buy your next property! Also the reason I haven't contacted you about assigning a deal to you is because I just can't resist buying all these deals myself! It's an addiction. Welcome to my 'hood!

HI CBR,

Thanks, it means a lot to me to hear that since you have been a mentor since I started this. Do you have any brokers you'd like to recommend. I am gathering info at this point so I can make an informed decision as to who I go with.

Also, what do you do when you have the choice of taking a point for a lower monthly payment or do you do the opposite? I know that not taking it gives you the TVM but does it really pertain to what we are doing? Any input on this would greatly be appreciated!We call this my "learning wall" instead of curve...lol;)

Thanks! Angie

Don't pay the points. It takes to long to get your money back. What is your exit strategy?

Hi CBR,

Thanks. My exit strategy is to hold for years until the market goes up. At that time I will re-evaluate which properties are not doing as good as the rest. Then take them and do a 1031 exchange into a larger property. Keep the good ones indefinately...

Hi Angie, In the case where you are going to hold the property a year or two, it may be worth your while to pay the points up front for the lower rate. For example if you have to pay two points to get a one percent reduction in rate, then you break even at the end of the second year, having saved interest equal to the points. You then get the savings for all the rest of the yeas you have the mortgage at the lower rate. Planning on holding less than two years in this example, pay the higher interest rate and avoid the points up front.

HI BoConner,

Thanks. Yes it would be a buy and hold to rent out. Thanks. BTW are you familiar with a first cash out? Best, Angie