Looking for Second Opinion on Financing Strategy

[Brandon Sturgill]

So, the question below was posed to my lender, who was quite vague with a response. I need some help with this strategy. Here are the particulars:

I have been contemplating a strategy to move into my current rehab project and sell my main residence...just unsure if it makes any sense to do so. Here is my current situation:

Main residence appraised $122,000 (loan balance upon re-fi $75,000)

Rehab property appraised $132,000 (purchased at $89,900)

Combined Value $254,000

Current Loan is $197,000 (including $34,350 construction component)

We discussed keeping the mortgage balance at 80% of appraised value of my main residence upon the sale of the rehab project ($122k x.8= $97.6k) The process would encompass selling the rehab property and paying the loan balance to the 80% figure while retaining the difference acquired through the sale of the rehab...(comparables are selling in the $160's +). It would look like this:

Rehab property

Projected Sale Price $160,000

Exit Costs ~$15,000

Payment toward principal ~$100,000

Loan Balance ~$97,000 (80% appraised value main property)

Cash for next purchase ~$45,000

If I sell the main property and occupy the rehab, would the requirements be the same?:

Main residence

Sales Price $122,000

Exit $11,000

Payment toward principal ~$91,000

Loan Balance ~$106,000 (80% of initial appraised value of rehab property)

Cash for next purchase~$20,000

This scenario creates a positive equity position of $54,000...if the after repair value of the rehab is indeed $160,000 (versus the initial appraisal of $132,000). So what happens if I "rinse and repeat" after selling the main residence and occupying the rehab...?

If I take another blanket loan on two properties and you loan 80%LTV how would that look? So, for my purposes, let's say the next investment property is purchased at 70%ARV of 120,000 and needs $15,000 in repairs for resale:

Main residence appraised at $160,000

Rehab property appraised at $120,000 (purchased at ~$70,000)

Combined value $280,000

Construction Loan??$15,000

80%LTV= $224,000 So, if this scenario is somewhat accurate, equity position created would be ~$54,000 on the main residence (loan balance $106,000-Appriased value $160,000). And the difference from the purchase of the second property (~$70,000) and the new blanket loan at 80%LTV (~$224,000) is $154,000....which I use at my discretion...??? Am I totally off-base with this?