Look at these CD rates

im Intrigued by your idea and would like to know more but frankly I can fund a real estate loan for $100k make 7 points ($7000) plus 10 to 12 % interest. And I currently make a few of those a year. It is money at risk and it ties up the capital for 9-12 months . The CD is insured money . Feel free to share the nature of your invest if you can.

Well, I haven’t done the Airbnb and that’s a whole business in itself. When it comes to investment properties, i aim to buy the property at max 90% of the value, put 20% down payment and get a positive cash flow that yields at minim 8% annual returns. If things really work out , I make another 10% a year in appreciation. The last three years have seen 40% total appreciation. Crazy and abnormal. then thanks to tax laws that allow writeoff of interest paid on the loan, repairs, and depreciation it’s magic. Great cash flows but on paper for tax reasons, it looks like you broke even or had a loss.

If you transition from a residence to a rental do you start depreciating the house? So you borrow 80% on a house in an era of rising rates? How do you determine the value of a place to them try to get it for 90%?

starting out she already owns the place. She probably owes about $326,000 at this point. Zillow says it’s worth $736,000. Seems high. She thinks she can rent rooms for $1 k each. Her mortgage at 3.5% is a nice number. As said. principal at this point is about $600 of her payment.

she’s wondering if she should pull out some equity and go buy another Bought the place in 2015 for $440,000 so either we lucked out on the buy at the tine Or the neighborhood has gone crazy.

Yes, you can start depreciating if you convert it to a rental. rates today are 6.25 % for a 30 year fixed, not the Fed subsidized 2 and 3% we saw during Covid but still pretty decent rates. First order of business when you identify a property and before you make an offer is to determine the as-is value and the AR value (after repairs). If you are flipping this is a critical step, if you are holding, still important but not critical. The most common method of determining value is the Comparable method. What are similar properties, in similar condition selling for in the neighborhood? I use the MLS but that requires a subscription, you can also use Zillow or Red Fin. Note: You only want to look at closed sales not current listings. Once you determine a value you can do the math to come up with your offer. In the scenario you described , consider keeping the existing 3% mortgage and accessing the equity with a home equity line of credit (HELOC). The heloc will give you the flexibility of only drawing on it when you need the cash, as opposed to a loan where you have to borrow the money, and pay interest, immediately. Also a heloc has an interest only payment feature which gives you better cash flow. bought for $440k in 2015, now worth $736. Sounds about right. I don’t have a lot of confidence in Zillows numbers because their business model of selling leads prejudices the numbers. But, no doubt values got crazy. Now here is the thing, the low inventory of homes for sale right now , and the lack of distressed sales make it hard to negotiate a good deal. That’s why you have seen investors pulling back in the last year. I walked away from a few deals in the last 2 years that as it turned out, would have been profitable. The asking pricing did not meet my criteria and the Sellers wouldn’t budge. I intend to write a post with tips and ideas on how to search, identify and make offers on distressed properties at some point soon. Another hot topic for those that already own properties is the concept of adding ADU’s to maximize cash flows ( Accessory Dwelling Units).

Sure a business can have aCD. Usually a business gets a money market acct as it is more liquid than a CD. But if it’s cash u won’t need for a few months a CD is good option

I’m fishing around. Frustrated. Bof a where we process our checks has a money market whose rate is .08. Yeah that’s either 8/100 or 1% or maybe it’s .8%. In a market where mm are at 3-4. Idiotic. Sure would be nice to process $20k of payments then slide it over to a mm paying 4%. Not sure if you can do that among banks that aren’t related. Gotta look into that. We have quite a bit floating around. Seasons fluctuate and we go up and down but easily have several hundred thousand rolling around at a tkme

Bank of America is the worst priced in almost all of their services. Higher rates for mortgage loans than the market on any given day and lowest yields in deposit products. They have a great name and enjoy great consumer loyalty, not sure why.

Check back here from time to time I plan on posting some tips on managing rental properties and also identifying properties to target as acquisitions.

Will do.

Merrill (BofA) has a fully liquid account at 4.5% currently (“Preferred deposit”). Might go to 4.75 the 2nd week of May after the 25 pt fed rate hike. You can get 5% many places, but you’ll be committEd for 3-6 mo.