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We took out a home equity line of credit on our personal residence to buy the first house. Then, improved it to get a loan to value ratio of 80%. Then, financed the house to a traditional 30 year mortgage to pay off the HELOC. Rinse, lather, repeat 10 times over 5 years. We paid all ten mortgages in parallel.
Then, we paid off the mortgages to be debt free. It took 10 years to pay them off. So we haven't bought a house since 2007.
We are currently in the market to buy our next house. If it's the same model as the previous houses, we'll pay cash. If it's a different model, we'll put about 60% down and mortgage the rest.
DM if you want to talk more.
Quick response time is my number one need
We use them only to market a vacant property. They screen prospective tenants and put then in our house. Nothing else is bothersome enough to hire out.
M1 - you don’t use their services during the contract period that you have your tenant?
Nope. They charge a monthly service fee every month. Out of 120 opportunities per year (10 houses X 12 months), I get about thrre calls. Those can be handled remotely (send a plumber to this address, send HVAC guy to that address).
Plus, I think the PMC is going to call me once they receive the problem from the tenant. Or, they are going to hire someone who isn't careful with my money.
M1 - Care to share how much monthly fee they charge and in what city/state?
Also, 10 houses!! Awesome!!
I don’t. Only have two now. Will have 3 more next year.
It’s only really burdensome when tenants turn over. But I’d rather have the control
Atlanta. To place a tenant they charge one months rent. I never looked into the monthly fee because it would need to be nearly free for me to consider. That's how little of an inconvenienvlce the calls are.
M1, M2 - Extending the topic here, for managing multiple rentals 3/5/10, are you paying all mortgages in parallel? How do you qualify for such parallel mortgages? Or am I missing an obvious alternative. Assuming, you guys are not uber rich that you are making all cash full payments to buy these properties outright - in which case my question is moot.
Thanks M1. Yes I want to connect with some more questions. But the DM functionality does not seem to be there anymore. Will you share a burner?
I currently have 4 properties and over 8 units. While mostly is operational, I've realized the need to have a company to free up my time to do other stuff (personal or business like get more properties). Part of my asks are how are they going to ensure my RRR (req rate of return) is met and what happens if they don't. I've found a few companies that will support me while I go for other properties but the biggest hassle I was looking to address is ensuring I'm compliant with DC rules and regulations cause 1 wrong word can screw you. Take that into consideration from a cost/benefit perspective.