ADVICE Please...... Got to be a way to get $ out

[Michael Dunn]

Good Evening BP community

I need to get as much insight and advice as possible by Friday , as I am set to talk to my Lender about What ( If any ) Cash Out and or HELOC options I may have , given my current situation

And that brings me to my current situation, and me wondering if I have any " Likely " options at all, to get some Immediate money from my Newly Purchased property.

A quick Rundown ..... I Purchased this property back in December of 2015

There is $40,000 of Equity in the property ( Based on what my Total All-In costs are vs what the house appraised for )

There is also a Renter in the Mother0In law " Separate from the main house " But still connected by Roof Line only. This Renter pays for my PITI on the property 100% .... I virtually have no Out of Pocket expense as the Rent money from the renter covers my PITI

( My Lender is also aware of the Renter, and looks at this as a plus to them Lending on the property as I was told )

I also do Home repairs and remodeling for a living, of which My Lender is aware of ( so hopefully this will be a benefit )

So my question(s) boil down to ...... Given that I purchased the house so recently , but yet it has $40,000 in Equity ..... Is there any way / thing(s) to ask my Lender what my Options are, regarding getting at minimum ..... $20,000 of the $40,000 , for the sole purpose of putting 20% down on 1 of 2 properties that I have been keeping an eye on , and thus buy either of these properties as an Investment property ( as a Rental )

There are 2 ( what look to be ) Great properties that just need some TLC .... Both look Distressed/abandoned/maybe even Foreclosed

Also not sure if going with a Portfolio Loan would give me the best chance of tapping into the Equity on my Primary ?

Maybe my Lender will bypass any type of Seasoning Period before I can tap into this Equity ( use it Now ) , given the fact that even if they Loan me $20,000 of the $40,000 .... They will still be at a LTV of 80% .... which " Covers " them

Also, my Lender knows and has seen the progress of me renovating the house that I just purchased, as well as knows my Background/Job of doing Renovation/Repairs for a Living for over 8 years now ( So I would think that this could only help me ) , in giving them relief in knowing that if they Loan to me for another Distressed property.... That I have the skills and time to renovate it and Increase the Value of it drastically , as I did on the Property that I just purchased/they Lent to me on

Anyways, just needing some advice and insight on what I can expect them to likely tell me when I call them this Friday, AND also if anyone knows of any creative financing or any ideas that I can look into, to give me the best chance of tapping into this $40,000 Equity .... Hoping to get $20,000

Thanks so much,

really appreciate it

[Ralph R.]

@Michael Dunn

Michael  the part about your strategy that really scares me is the big hurry you are in. Remember "Rome wasn't built  in a day"  you have just purchased a property, its only partly rented out, you haven't got 2 years land lording on your income taxes so you cant  use rental income as any basis for a conventional loan, and you are in a big rush to increase your debt.  You made no mention of cash flow from your current property, only that is break even.  whats the bank spose to do with that?  how does that effect your odds of getting a loan? 

 slow down a bit.  Those 2 properties aren't likely to be the last two deals to ever cross your path.  let your current property "soak" a bit, and get it to show cash flow not just break even.  wat if something happens to the current tenant?  Could you make the payments on all your loans?  build some cash reserves, save a down payment.  Leverage can be a good thing.  It can also put you in bankruptcy.  You are trying to purchase 3 properties with no skin in the game.  commendable maybe but also a good way to bump your head, HARD.  The faster you are running the more you can get hurt when you fall.  Look for a partner/ mentor, maybe  one of the targeted properties owners can help out?  Real estate takes patients and time.  you can't rush it. if you do your portfolio foundation will be narrow and weak, and likely crumble.  3 properties mortgaged to the hilt with no cash flow isn't something most investors would want.

RR