Posted by James-Ca on February 07, 2008 at 23:34:12:
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No more HELOC’s. Now what! - Posted by Corine
Posted by Corine on February 05, 2008 at 24:57:08:
I never considered in my investing plan that I wouldn’t have heloc money available to me.
Need help making a decision and have no one to turn to, certainly not the loan officer who’s trying to close.
If it were not for the helocs I already have in place in CA on three properties I own there, I would be in trouble.
I recently refinanced a loan to remove the MI. A bit regretful as I should have waited a bit longer.
Now I’m refinancing my primary, maybe, and thinking of pulling 50K cash out. Wells Fargo is still willing to go stated income, so that’s another pressure I have. Maybe those will also stop, and this will be a one time shot.
I’m scared. I don’t want the higher payment, but also don’t want to keep digging into the helocs.
I still have 270K available to me on my present helocs. Living expenses for the year 60K and I’m in RE sales. Yikes. I have to major hussle. I borrowed from my helocs 30K last year to keep going.
My plan was to take the cash out of this house and pay down the heloc to keep those paid down, but I don’t want the higher payment and impounds. Hate impounds.
Also, the fees aern’t bad, but I’m paying a half point to buy the rate down to 5.375 1,300 dollars.
Current rate 193K loan balance at 6.25
Refi cash out 243K loan at 5.375 point plus normal closing costs.
It’s late, I’m exhausted and I need help. This investing all seems like a real bad idea right now. I’m negative 1,500 a month on nine properties. Prices in the Carolinas are the same as 05 when I purchased. CA. Purchased in o4 still ok for now.
Allot of work for not much so far. Scarry
Or, the other option, do a simple refi, no cash, and hustle my ass off.
Does anyone think rates will be coming down into the 5 range? I mean 4.875, 5?
Re: No more HELOC’s. Now what! - Posted by JohnK
Posted by JohnK on February 11, 2008 at 03:20:05:
You sound like a financial criminal. Why don’t you just pay the money back, as you have already aGREED to do? You probably shoud go to jail for fraud for lying on your contracts, which is what I’m going to pursuade my representatives in Congress to get going to deal with criminals like you. Help? You need to go to prison for mortgage fraud! Lol!
Re: No more HELOC’s. Now what! - Posted by Gene
Posted by Gene on February 05, 2008 at 08:21:38:
“I’m negative 1,500 a month on nine properties.”
If you plan on continuing to invest I would definitely read a few books on Real estate investing. Cash flow is the key.
I don’t think there is any easy solution for your immediate problem. Sounds like you want to steal from peter to pay paul but how long can you keep that up? If you have any equity, I would sell. Otherwise…I would try save my primary and walk away from the rest.
Re: No more HELOC’s. Now what! - Posted by Corine
Posted by Corine on February 05, 2008 at 10:56:09:
I agree with you to a certain degree. I prefer to purchase a bit negative cash flow and buy quality, in quality areas rather than just cash flow for cash flows sake. I think you miss read, there’s nothing I need to save. I’m actually 1300 a month negative, 15K a year. That’s really nothing I can’t handle, and with the principal pay down, I’m actually break even. I just wish the days of appreciation were still around.
Sell now? Na. I purchased with long term hold strategy, ie. decades, with excellent 30 year fixed mortgages. Someday, perhaps many years from now, this market will turn around and I’ll be in a good position.
There’s no blood letting, everything is well rented, all very long term, all new houses. I just need to ride this out.
My question was should I take cash out to pay helocs. Your right, I am paying Peter to pay paul, but that was just to open up the helocs…just in case. I’m not creating more debt.
Ie. Have wamu at 95K with 28K borrowed.
WF 112K available, 44K borrowed.
I keep them well below 40% LTV for credit reasons. I was just going to pull 50K out of my primary to pay these off and back. I can fix at 5.25, but I decided to keep it rate and term. No cash out.
I think even Schumacher would agree, his early years in Venice beach were lean, and didn’t necessarily cash flow, but things did turn around…years later.
Have you read Buy and Hold, speaking about books?
Re: No more HELOC’s. Now what! - Posted by Gene
Posted by Gene on February 05, 2008 at 11:09:25:
“Have you read Buy and Hold, speaking about books?”
I did read a few books on the subject…and didn’t think it was a good strategy for me. I can see its appeal to investors that have less time to invest. I just require more from my portfolio.
I believed more in the “timing” models so I sold my Cali properties in 2005.
I am amazed at how optimistic you are.
Re: No more HELOC’s. Now what! - Posted by Corine
Posted by Corine on February 05, 2008 at 12:01:49:
I guess I’m not smart enough to time the markets. I’m confused by your statement that buy and hold requires less time, isn’t it the reverse?
Day trading isn’t for me either.
Buy quality, buy new, manage yourself, get good financing, and voila, twenty years from now, mortgages pretty well paid down, rents most likely up, appreciation, optimism aside, absolutely. That’s my plan.
And yours? How many properties did you unload in 05? Are you timing the market to get back in?
Besides, the 15K negative per year? I need the write off, which is why I got into investing in the first place.
Re: No more HELOC’s. Now what! - Posted by Gene
Posted by Gene on February 05, 2008 at 12:29:51:
>>>>I guess I’m not smart enough to time the markets.>>>
Check out Robert Campbell’s book “timing the real estate market” it breaks it down. Its time consuming to execute…but worth it.
>>>>>>I’m confused by your statement that buy and hold requires less time, isn’t it the reverse?
Day trading isn’t for me either.>>>>>>>>
I actively buy and sell properties and paper. Keeping my money producing at top performance requires constant attention. I also manage my crew doing rehabs which is definitely work. Where as the few rentals that I have kept…are very passive. Buy and hold…is easier but less profitable for me.
>>>>>Buy quality, buy new, manage yourself, get good financing, and voila, twenty years from now, mortgages pretty well paid down, rents most likely up, appreciation, optimism aside, absolutely. That’s my plan.>>>>>>>>
I would agree that this is a good plan if the properties cash flow. I consider a property that takes money from me every month a liability…not an asset.
>>>>>>>And yours? How many properties did you unload in 05? Are you timing the market to get back in?>>>>>>
If I can recall everything…I unloaded 9 properties in 2005, but I bought two. I still have 7 rentals but they are all cash flow positive (the worst brings in 25% above my morgage payment). And the all are 15yr loans or less.
My best returns in the past 3 years has been private loans.
>>>>>>>Besides, the 15K negative per year? I need the write off, which is why I got into investing in the first place.>>>>>>
I do pay taxes…but I work to keep them as low as I can. IMO…its not a bad problem to have. I got into investing to make money.
Re: No more HELOC’s. Now what! - Posted by Kristine-CA
Posted by Kristine-CA on February 05, 2008 at 16:48:49:
Hi Gene. Interesting post. I also sold everything I still had in 2005. My
strategy was always flipping, but in 2005 there were some deals that
seemed like good buy and holds. I ended up disliking that stratgey
after about 8 months. So, unlike you, I couldn’t see what was coming, I
just lucked out–selling at the top, not because of value but because of
frustration.
Speaking of lenders, did you get my email regarding hmls/private
investors in our county? I’m looking for a refinance on a rehab.
Cheers, Kristine
Re: No more HELOC’s. Now what! - Posted by Gene
Posted by Gene on February 05, 2008 at 17:15:10:
Kristine, I did not receive your email. I don’t know too many private lenders that are still lending/buying paper around here. Most I talk to are afraid of large price drops. If you want…email me the details and I’ll check out if anyone is interested.
The main Hard Money lender/broker I have used in the past for rehabs…closed shop and moved when things started slowing down a year ago.
I have used Equity One…the broker is a character. He
has been in business a long time. He’s not cheap but the is quick and professional.
Gene
Re: No more HELOC’s. Now what! - Posted by Kristine-CA
Posted by Kristine-CA on February 05, 2008 at 17:20:42:
Hi there. Thanks for your reply. I’ll send the email again.
Dan at EQ1? Character is putting it mildly. He’s a trip. But he does what
he says he can do and he does it fast. I’ve found a better hml (national)
than that if you’re interested. Re-sending you the email now…Kristine
Re: No more HELOC’s. Now what! - Posted by James-Ca
Posted by James-Ca on February 07, 2008 at 19:24:03:
Hi Kristine
I am still searching for the hml that is fast and reliable…Does the hml (national) that you use service southern california? I appreciate it if you could send me the hml contact info…Thanks a lot…
Re: No more HELOC’s. Now what! - Posted by Kristine-CA
Posted by Kristine-CA on February 07, 2008 at 21:16:57:
Try Active Finance Group. They have a website and you can submit your
info. They will call you back asap. They are fast. But in this market you
can be sure that their appraisal/comps will be conservative. They lend
70% of ARV. Also, you will need to have some cash in the deal when you
start with them. Kristine