help finding a way to borrow money against property equity once fully paid off.

Chicago, Illinois
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help finding a way to borrow money against property equity once fully paid off.

Mario Morales
Member since 2021 · 11 posts · 1 vote

hello everyone,  is there any banks or lenders of any sort that would give out loans on a paid off property if the owner has low income ?   My Dad wants to invest his money into my flips. im offering him 10% in 6-8 months.  His house is fully paid off  worth about $250k . Any help would be appreciated. 

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  • Bill B.
    Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
    2y

    Does he plan to live there until he dies? He could get a reverse mortgage. He could sell it to you and rent back. He could probably get a heloc or "cash out refi" at least at a lower LTV, especially if you signed as a co-signer. Please be very careful if you are risking your dad's home on flips.

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  • Derek BrickleyBusiness Member
    Lender · Ann Arbor, MI · Member since 2021 · 690 posts · 236 votes
    2y

    Hey Mario, 

    If your dad fully understood and was okay with the reverse mortgage that could be an option, however that would exceed my risk tolerance.  As Bill mentioned, you could potentially be a coborrower for him on a cash out refinance to increase his buying power.

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  • Sophia Buesing
    Lender · Denver · Member since 2023 · 127 posts · 26 votes
    2y

    Is it a investment property? I have a 12 month refinance program that could work. 

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    2y

    His income will determine in a big way how much he can pull out. 

    He might not be able to get a 95% LTV mortgage on a $250k home... but could he get a $100k mortgage on social security income? Yup, that's very plausible.

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  • Michael Thach
    Member since 2019 · 144 posts · 93 votes
    2y

    HELOC with you being a co-sponsor or applicant might work ? Or cash-out refi ? You doing flips

    for 10% for 6-8months is a good and fair return for him but the cost to get the loan will cut deep. If the lender is asking 1 or 2 points for the setup, this might be a break even case, unless you guys plan to work together for longer. 

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  • Andrew PostellPro Member
    Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
    2y

    @Mario Morales yeah, give us some more details here.  As you can see there are several different solutions depending on the scenario.  The biggest question here is does he occupy the property as his primary home or is this an investment property?

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  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    2y

    This has DSCR loan written all over it. Grab that equity and get as many cash flowing SFR with 20% down as you can.

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