Live-In Flip Financing - The Intrim Step

[Ryan Johnston]

Hey BP community. I currently live in my flip that I completed about 2 years ago. Now that I'm about to hit that tax free mark of 2 years, I'm beginning to look for live-in flip #2, but don't know how to go about financing. I'll give some background:

I have about 6 figures of equity in the house that's locked in with a 30yr mortgage @ 3% and an interest only HELOC with adjustable rate. I planned to use the equity from my current house to fund the purchase price and renovation of my next live-in flip, but I'm unsure what to do with the interim step. Where it gets complicated is that ideally I'd like to renovate it while still living in my current residence for the sake of moving twice.

-    I've researched bridge loans and they're an expensive financing option that would cost me 20% down and 5% for fees.
-   I was thinking about doing a cash out refinance to get money out and have 2 mortgages for the duration of the flip. Not ideal but I do have the savings for it. Cuts into profit margin because of higher operating costs.
-  3rd option I've been looking into is selling, moving into an airbnb for the duration of the flip.

Are there any other options that you can think of? Something I'm missing or opinions of the options I've listed above?

Thanks for your response! I can appreciate outside perspective.

[Mitch Larrivee]

Hey Ryan, I've done this 4x now. Normally I save up for the next one while living in the current one. I have no problem draining my bank acct for the new down payment & renovation project since I'll pay myself back as soon as the current home sells. 

Another option (I've never done it) if you don't have the $ for down payment + reno, you could see about a hard money loan. Pay it back once you sell your old home/finance your new house.