All Forum Posts by: Alan Hicks

My primary house is on a VA loan.

Appraised at $270k (Balance is $216k).

I had it appraised last year for permit/tax reasons when I finished the basement and added 1100 sq ft.

I have 2 options:

1. Use existing appraisal and HELOC can go to 89.99% of LTV which will net me around $26k. Rate is Prime +1.25 (6.75%)

2. Pay for another appraisal, and HELOC can go to 95.5% of LTV which will net me around $40k, but rate is prime + 2.5% (8%)

Thoughts?

This will be the down payment on a 2nd rental property.

Correct - borrowing money to borrow more money..

Income is $117k, have $1500 extra each month (which has been paying down 1st rental property).

If I borrow the $26k, that is 1 year bonus. So very little risk.

Thanks for the reply.

I finished my 1500 sqft basement (library, theatre, full bath, 2 bedrooms, kitchen, rec room plus new HVAC) for $25k.

I know it will appraise for $130k, because I just sold my rental property 2 doors down with no renovations (less sq ft and smaller acreage).

Correct - cash only offer due to condition.

Maybe this is a fix and flip?

I found a 3/1, 1700 sq ft for $55k that need a total renovation.

I would assume a $25-$30k renovation.

It would appraise for $130k.

Option 1:

Buy, fix, flip

Option 2:

Buy, Fix, pull cash, keep as rental

thoughts?

Rent is around $800/month. Taxes are $1000/year

My primary is a VA loan, 30 years, 4.25%.

Purchase price was $219k, I owe $215k. Appraised for $285k.

I was thinking of doing a 100% VA-refinance to tap into the equity to purchase 2 rental properties (with mortgage of course ). Problem is the refinance rate is 5.25%.

No sub-$100k deals near me.. so it would normal 20% down and looking at $200/door cash flow.

Question..

I have owned a house for 13 years. Lived in it for 4 years, my disabled father lived in it for last 9 years.

I used funds from my 401k to purchase the 'replacement house' for my father.

Selling the old house and putting money back into 401k.

What tax things do I need to think of ?

Great question.

I just sold one of my rentals (3/1, 1400sq ft ).

Listed it on Zillow FSBO for $129,990. I just had it appraised for $118k (with no hvac).

2 things happened

1. No less than 75-80 agents called me asking to 'help' me sell it.

2. Hosted my own open house (8am-1pm) on a Sunday

I placed a small sign at the 4-way stop in my town of 1000 people.

I had had 37 people come through the house between 8am-6pm (yes - 6pm).

Monday morning, I had 4 offers:

1. Full asking price with $2500 towards their closing (FHA)

2. $125k with no closing costs (conventional)

3. $122k cash (cash)

4. Full asking with contingency. (conventional)

I chose #2 as my first option, but at $127,500 with 1 day due diligence due to multiple offers.

They agreed. End of story.....

I had an open house yesterday for my second home. I am selling it and buying something closer to my primary.

Showed it to 22 people in 5 hours. Not too bad.

3 offers

1. Full asking and I pay $5000 at closing

2. Full asking but with 30 days contingency on selling another property

3. Cash price -8% less than asking.

I will make the decision today on which one to accept.

Update - 
Allstate was able to quote me $575/year and didn't have to move my auto policy.

I have my primary and 'rental' house with Allstate - been with them for 5 years.

I am closing on house #3 (that is replacing my rental house ) on the 25th.

Geico requires me to move my car insurance in order to get this 3rd house insurance...
Liberty Mutual is worst  - must move my primary house with the rental...

Thoughts ?

Yes - I have the address. Tax assessment is $8360, so actual value is probably around $20k

No other liens. Vacant.

Probably a Section 8 property.