Financing Advice - Washington DC rowhome

[Terrence Bayly]

I am looking for advice to help fund my next deal. I am looking to buy a rowhome in Washington DC where cash is king. My plan is to buy cash, rehab (basic), rent, HELOC, repeat. I think cash would work better than financing in this scenario to hopefully get a better purchase price from the start. I would qualify for financing no problem but don't think I would get as good of a deal on the purchase price. I plan to utilize a HELOC to get my money back out after rehab and rent rather than cash out refinance if financed.

I am looking at pulling together $160-180k in cash reserves to make this happen. I have another investment property that I plan to pull $50k utilizing a HELOC, I can borrow up to $40k against my company 401k savings, and was planning to look for $50-60k in a personal loan from my bank. That still leaves me $20-40k short of my goal. Before going to friends/family or hard money lenders I was looking to see if anyone had creative ideas?

I have a very secure, well-paying job with a FICO score in the low 800s. My other investment property is in NC with a market value of ~$300k with an outstanding mortgage of $215k (hoping to get a 90% LTV HELOC). I have some cash in reserves but was looking to keep that in my pocket and do this all with other funds.

My numbers have ARVs at $275-300k so I was planning to HELOC after purchase, basic reno and rent to pay off the initial HELOC from my first property as well as the personal loan, loan against my 401k and any other money I have to borrow.

With the above scenario, anyone see anything I could do or have any ideas how I could reach my $160-180k goal while avoiding friends/family or hard money lenders?

[Russell Brazil]

I think you are probably just making this more complicated than it should be.  At the price point you are looking at, this is likely not a competitive property in a hot neighborhood....so I wouldnt expect much of a difference between a cash offer and financed offer.  When you are in the $600k's, the difference it takes cash to win a bid is somewhere around $15k over a financed offer. At your price point it would probably be about $10k, but I dont think you will be in a competitive situation as I imagine at this price point you are EOTR.

You should talk to @Upen Patel. He is a loan officer in the area....and you might want to ask him about the loan product that does a full underwriting for your preapproval, so you can make an offer using financing but be able to waive the financing contingency.