Securing Financing - Next Steps

[Ethan Simcox]

I'm going through the underwriting process right now to see how much of a HELOC I can get to leverage the down payment on my first Buy & Hold Property. This process I was told can take 3-4 weeks (appraisal, credit check, etc.). I think I am eligible for a HELOC amount somewhere between $10k - $25k. I'm looking in the Indianapolis market. What can I do in the meantime to prepare myself to take action on a deal? I listen to BP podcasts, plan on going to REIA meet ups, have sort of a newbie mentor, and have an investor-friendly agent referred to me by my mentor. What additional steps can I take to find my first deal? It's hard because I don't know how much $ I will get, but I don't just want to sit on my hands waiting for the underwriting to be processed. I'm thinking about "bird dogging" it with my mentor if he'll allow me on his property. Thanks, Ethan

[Shawn Holsapple]

@Ethan Simcox congratulations on taking some steps to move forward!

Do you have any credit cards you can get cash advanced on? If so, you could add these funds to your HELOC. Yes, you will pay a 3% [3 points] cash advance fee. That's still cheaper than hard money.

One way to work around the cash advance fee is to open a citionline savings account and "fund" the savings account with your credit card.  This is treated like a purchase and not fees will be charged by the credit card company.  You then just wire the funds from your citionline account to your local account.  I've done this a few times with "zero balance transfer" credit card offers.  PM for more details.

I think it goes without saying that do this at your own risk and DO NOT go to Vegas with the cash!

Once you have bought the subject property for cash you can either refi and pull the equity out or sell if you plan on wholesaling it or flipping it.

Don't forget, all the big box stores will give you at least $2k of in store credit.  You can fund your rehab with these cards as well.

I bought my first deal like this.  100% funded with plastic.

With that said, I always tell new comers to at least get one small rehab under their belt no matter what strategy they are going to do in the future. 

IMHO - I would buy a $20k-$30k REO built after 1945 and fix it up to rent ready status and then offer it as a turn key or rent ready property to a fellow BP member and list it on the MLS.

Even if you break even, the education you get is well worth the effort and you will be so far ahead of the average new investor.

I hope that helps!

- it's always good to see another Hoosier utilizing this great site!

Of course, you need to read The Ultimate Beginners Guide to REI here on BP

If you haven’t already, please read/listen to these books ASAP!

Rich Dad Poor Dad

Rich Dads Cash Flow Quadrant

Rich Dads Increase your financial IQ

The Real Book of Real Estate

The ABC’s of RE Investing

The ABC’s of PM

Rich Dad RE Tax Advantages

The E-Myth

The 4 Hour Work Week

http://flip2freedomacademy.com - free e-book

Flip2freedom episode 77[http://www.flip2freedom.com/a-3-step-formula-to-a-successful-balanced-and-insanely-profitable-2012/] - podcast - LISTEN TO THIS TODAY!

BiggerPocketsPodCast

Wholesaling101 You Tube Channel

Kent Clothier – You Tube Memphs Invest channel