Re: Your overall strategy - Posted by Stacy (AZ)
Posted by Stacy (AZ) on June 07, 2000 at 15:21:11:
I, too, was not one to embrace being a landlord. I didn’t have good experiences, years ago, when I first tried it. However, I didn’t have any idea what I was doing, either. But, I’ve gradually come around to the fact that it’s a good idea to actually own income-producing assets. I’m not implying that the property you’re dealing with now should be turned into a rental. That’s up to you. But as you proceed and gain experience, it’s something you should consider, or else you’ll be continually having to find new deals to generate income. Buying and holding mortgage notes could also be considered, but even these get refied about every 5 to 7 years, and you have to go find more. Building assets is the name of the game, for me. If I didn’t find a deal for a month or more, I’d still be able to live off the cash-flow. That’s my goal, anyway.
Your understanding of how I use my credit lines is pretty accurate. In your case, If I wanted to L/O, wrap, or hold as a rental, I’d definately put a mortgage on the place and pay-down my credit line. The money will be cheaper to use with a mortgage, and I’d regain the use of the credit-line to make all cash offers.
If this is not a house you think would be a great long-term rental, selling it may be the way to go. If you sell it outright, the gains are taxable as income at your current tax rate (if you don’t have a separate corp).