Investor · New Iberia, LA · Member since 2019 · 24 posts · 4 votes
I looking at buying my first rental property using a HELOC from my primary home and need some advise as to the steps I should take. First a little about the property; Its and a 1100 sq ft 2 bed 1 bath single family house that is currently rented for $550.00 per month. The current owner is willing to sell it for $35,000. It's a wood frame house on pillars that needs some fixing up, but overall nothing major. If I use my HELOC to purchase the property out right, how do I make sure the title is clear, should I get a new appraisal or use the appraisal the current owner has that is a couple of years old. Is there any thing else that I should have done that would normally be done when financing through a bank that I'm not thinking of to help protect my investment.
My overall plan is to make some repairs and try to bring the value up as much as possible so I can get the rent up and refinance the house to get the money I took out of my HELOC back so I can invest in other properties.
@Joshua Walker the Title Agency you use should provide title insurance for an additional fee. I always get it and I would recommend you do the same. As for the appraisal that is up to you, but if you have money for it I would get it appraised.
@Joshua Walker the Title Agency you use should provide title insurance for an additional fee. I always get it and I would recommend you do the same. As for the appraisal that is up to you, but if you have money for it I would get it appraised.
I get an inspection to ensure that I don't have a bottomless pit. Having another set of eyes on the property is very helpful in determining how much work needs to be done. I almost always learn something new.
There are not many deal breakers for me at this stage of the game, but I want to know that...say...the Federal Pacific electrical panel will cost about $6000 to replace and if I leave it, I may have difficulty getting insurance. That sort of thing is fine if you build the costs to replace it in, but can break the numbers if you don't know the expense.
We have also found termites in this manner, before I knew what to look for. (Search for my name and "big circus tent" for the outcome of the termite story)