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Originally Posted by XLexusTech
Vegas.. I have 2 loans the ole 80/20 from the BS loan days... 80% conventional which is likley 90 LTV on itself.. 20% HELOC which I would consider paying off... if i did the Net cash flow would be about 300/month and the initial outlay would be about 35K.
I thought a short sale is as bad for you credit as a foreclosure? and since the HELOC would have to be paid in full it would be tough to impossible.
Thanks for any help... the advice is appreciated.
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Rates will go up and that heloc will bite you down the road. I've had conversations with many of my past clients that we've closed short sales for and it can be easy on your credit depending on the rest of your profile. I have one that went from 830 to 810 and 800 to 750. (Approx.) A short sale is a settlement of debt, a foreclosure is a black eye on your credit and you forever. It's on a mortgage application, job application, home owners insurance applicatioin. You can get obtain a conventional loan in 2 years after a short sale, and 3 years for FHA. I've had good success with Helocs taking 6-10 cents on the dollar through a short sale and many times the 1st lien has paid it, not the homeowner.
Clearly, there are unlimited variables. From who your lien holder is, you financial position, State laws, on down the road. Find a competent local expert.....
Quote:
Originally Posted by GregWeld
The key for INVESTING like Todd is doing -- is keeping the properties CLASS A... and investing in great neighborhoods where good people want to live. All the properties I've ever invested in were always class A apartments. You get a better tenant... higher rental rates... and less vacancy etc.
Todd -- I think your rentals should be unaffected by "down the road" events. You've positioned your self well. Great underlying price paid. Low fixed rate mortgage. You'll get good rents because the properties and management are nice. If anything - my guess is you'll be able to RAISE rates as housing prices firm because the prices paid for new purchases will have to be reflected in the rental rates. A rising tide floats all boats. The tighter the market gets with inventory absorption - regardless of who is buying the better it will be for everyone.
We just raised our rental rates 50% in one building I own (an LLC with other investors) and 35% in the one I just invested in (we're doing a major redo of units as they become vacant - raising the quality a long way). Over the next 10 to 15 years these units are going to make nothing but money.
Selling a depreciating asset to buy/invest in an appreciating asset with cash flow is the smartest move you'll have ever made in your entire life (other than marry Kelli). I'm proud of you for having the guts to make the move.  |
I'll take wisdom over speculation anyday. It makes sense to me as housing prices and rates increase, rents will follow. I've always been floating around in the glass with it half full and empty at the same time. It's kept my nose pretty clean over the years.
It wasn't an easy deal but you have to grow up and be a big boy someday.
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Originally Posted by Flash68
Nice work Todd. Your discipline here is inspiring and painful at the same time. 
I have really tried to minimize my depreciating assets overall as well and I am down to just one. Yep, this stupid Camaro. 
You are in a great position there with your craft and recognizing the opportunity. Congrats on capitalizing on it. That will be your Social Security (and then some) when the real one has nothing left in the coffers. 
The fire extinguisher in the kitchen is a nice touch. Not many LL's I know would provide that. Smart.
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You must have hobbies as an outlet. I pissed so much money away in this one and others. This hobby just happens to be the most expensive and time consuming I've every experienced. I'm enjoying the simplicity of hunting, fishing, golfing, fitness, etc.... for hobbies. In comparison, they are inexpensive and easy. Once I get where I want to be and the desire is back, I'll put a brawler together. Maybe I'll just buy yours when the Wife puts her foot down.