All Forum Posts by: Andrew Rader

I have an investment property in OBX and was wondering if anyone in the area has had success with mid-term rentals (furnished finder, etc.). Is there a market for housing professionals or traveling nurses? I thought it could be a good way to supplement during the off season.

Thanks,

Andrew

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Hello - I am a currently looking to purchase a second home via the second home loan with 10% down. The company I am working with does not take into account the projected Airbnb income so I qualify for a much lower loan amount that I expected. Does anyone know of a mortgage company or bank that uses Airbnb income towards your debt to income ratio? Thanks!

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Quote from @Bob E.:

@Andrew Rader I personally believe 30 year loans are for suckers. As for 40 years, don't even mention it.

Look at the amortization for that loan an I bet you will find that after 20 years you will have paid off a whipping %15 of the balance. Part of the game to build equity is amortizing your loan. If your purchase can't do that you are reaching for a deal that is broken. We are about to enter a recession and the fed is raising rates. If you need to get out of that deal and things have not appreciated your will be in a world of hurt.

Hi Bob. Thanks for the response. I see your point here but I would argue that a lower monthly mortgage leads to higher returns and ability to invest that money elsewhere.

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Quote from @Chris Seveney:

@Andrew Rader

Curious what type of rates they have on those types of products?

I believe it is 6.5 but I’ll have to get more info and let you know

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Quote from @Alan Lacey:

Many time the rate adjustment for those programs offsets most of the payment reduction from going interest only. Just have to compare. Other than that there is nothing wrong with the product.

Great point Alan. I’ll have to look into the points

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Quote from @Dustin Rosenberg:

Quote from @Andrew Rader:

Hello - I was approach by one of my lenders with a new product. It is a 40 year fixed rate loan with the first 10 years interest only and then it turns into a traditional 30 year amortized loan. The idea behind this is to still have cash flow in the first few years while rents catch up and then by the time the 30 year loan starts you are in a good spot. I would love to hear the community’s thoughts on this! Thanks!

One of my favorite products on the market right now. It's honestly a no-brainer if you ask me. I know a lot of people taking advantage of this product right now.

Hey Dustin - thanks for the input. Love to hear this!

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Quote from @Malcomb Stapel:

Quote from @Andrew Rader:

Quote from @Malcomb Stapel:

Quote from @Andrew Rader:

Hello! I have recently discovered the HELOC tool but was wondering how to best use it. To me, it does not make sense to use for a down payment since the return on the property would have to cover the new loan and HELOC interest payments. However, could I purchase an investment property in full using a HELOC and then refinance the property and pull out the initial HELOC investment? Hopefully this scenario makes sense! I would love to hear your experience and/or thoughts. Thanks!

The answer to the last part of your question is yes. You can use the HELOC to pay cash for a property assuming you have enough. Then you could finance it and pay the HELOC back. But, you will still need to be at 80% LTV. So if you go over that, you may not be able to pay back the full amount.

As for the first part of the question, it can make perfect sense. I used a HELOC from my first investment property to make the down payment on two additional units. The extra $700 in cash flow per month more than makes that less than $100 interest only payment on the HELOC.

This is very helpful thank you. When you say 80% LTV, is that regarding the property I am purchasing with the HELOC or the property I used for the HELOC? What do you mean I would not be able to pay it all back?

Both actually. Most HELOCS will be 80% LTV on whatever property you are pulling it against. On the property you purchase, after you have done the rehab, the bank will refinance it up to 80% of it's ARV. That means whatever the difference between what you have in it (purchase and rehab) and what they are willing to refinance for, that's all the money you will have to repay your HELOC with. This probably makes sense to you already, but here is an easy example;

$60k purchase price (cash with HELOC)

$30k rehab price

$90k all in

$100k ARV

Bank will refinance you up to $80k, or $80k, leaving you still in it for $10k

This is super helpful! Thanks so much Malcomb!

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Quote from @Golfran Alejandro Rivera:

Hey Andrew,

I’m stationed out here and intend to get into multi family after our next move. I can a take a look at the property for you and give you input if you’d like.

thanks Golfran! Just sent you a message

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Hi all! I am currently looking at a four-plex in Fayetteville, NC. I would love to chat with a local expert (agent/investor/etc.) on the specific area because I am an out of state investor and do not have a good sense of the specific neighborhood. Thanks inadvance!

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All Forum Posts by: Andrew Rader

Andrew Rader has started 8 posts and replied 18 times.

Post: Outer Banks - Good mid-term rental market?

Post: Second Home Loan Options

Post: Is this loan product a good idea?

Post: Is this loan product a good idea?

Post: Is this loan product a good idea?

Post: Is this loan product a good idea?

Post: Is this loan product a good idea?

Post: Is it smart to use HELOC as a cash offer for investment property?

Post: Fayetteville NC Property Question

Post: Fayetteville NC Property Question