Funding and Finance advice on Reno for 8 units& flip business

[Lauryn Meadows]

Okay I’m needing some advice on my business finances. I purchased a mixed residential portfolio in April with 8 units. All need improvements ($5k-$10k/ unit) and rent can be increased substantially.

(Current GMI $3676/ market rent should be $5000).

Purchase price $250,000

1st mortgage $200,000 (through local bank on 20 year portfolio loan)

2nd mortgage $50,000 owner finance for the down payment

Properties AS IS appraises for $372,000.

Once the property seasons in a year (April 2019) we plan on doing a commercial LOC with the bank that we have the loan with for the that is already there.

Should I try to make some of the improvements (what I can afford) in the mean time or pay off the 2nd mortgage and pull out that equity without having to do another appraisal? Basically I don't want any of my cash to be stuck, I want to be able to pull out any cash I put into it with a LOC.

Then I plan to use the LOC to help fund some of my flips.

Currently self funding my flips (one at a time) so all of my cash is tied up in a current flip. Hopefully we sale that in a couple of months and we plan to pay off our primary residence and do a HELOC on it.

My game plan was to make improvements with some of the money we made on flips, but I need some of that money to pay my personal bills and it’s just seams like a slow process. I want to scale but first I’d like to maximize the cash Flow on my 8 units.

Should I be working on finding additional funding for the renovation on the rental units and flips?

Any advice is appreciated!