All Forum Posts by: Patrick Lindsey

I've read the contract, it pretty much says that they can cancel the line any time they see fit-just wanted to see if anyone has ever had it happen to them and under what circumstances. I've asked title companies and mortgage brokers regarding how to ascertain the remaining balance on a loan and they've always told me they would have to get it directly from the lender, didn't know if an attorney could go at in a different manner. Good to know, thanks.

A little background: I have two HELOCs on 2 of my 4 rentals. I'm debating whether or not to consolidate the debt from one HELOC (currently at 6.25% APR) to the other which charges less interest (4.75% APR). I've heard its always good to have debt on a property to maximize your returns through leverage (smartly of course) and to show that the property is encumbered by debt in the case of incident that exposes you to liability.

If I consolidate the debt under one line it will save me about $400 a year in interest payments that I can put towards paying down the principal faster (which I guess may save a little more in interest every year as well) and then get positioned for the next deal that much quicker. $400 a year isn't exactly a life changing number so depending upon your feedback I could go either way.

1) Has anyone ever heard of a bank canceling a HELOC for not having a balance on it for a certain duration?

2) How do lawyers determine the outstanding balance on a HELOC if they are looking at whether its worthwhile to go after the landlord or not?

Thanks for the feedback. I'm not looking to get the first appraisal adjusted, just trying to maximize appraiser's value in the future when applying for HELOCs in order to get the biggest line possible for tying up the property. During the process of acquiring the first HELOC I did get in contact with Wells Fargo (the bank I went through for the HELOC on the investment property) and stated my case. They weren't receptive to my argument and supporting comps so I'm thinking the best way to work this is directly with the appraiser. I wanted to see if anyone else has tried this and if so, what they had done specifically.

I recently got a HELOC (about three months ago) on a rental property and the appraiser undervalued the property by around $20,000 (significant since it was valued at 54K vs. the 75K that similar properties in similar conditions were selling for in the neighborhood). I think this occurred because I had recently bought it as a foreclosure and there were some other foreclosures in the area that had been bought. Needless to say all of these properties needed 20K+ in work to be comparable to the neighborhood average. I don't think it is a sound practice to compare a house in need of a significant amount of work to ones that are market ready. Also it would seem that there are two types of values a property could have: 1) The average retail amount 98% of homebuyers would pay for the property using conventional financing methods and 2) The amount an investor would pay for a property using all cash or equivalent means. Obviously this is not a new concept to anyone reading this, but apparently it was to the appraiser that appraised my property.

My question is how can I explain this to the appraiser to get a more accurate appraisal of the property? I'm going through the process again with my new personal residence (also a foreclosure) and am planning on pulling comps to provide to the appraiser. I think comps support a fair market value of around 100K-105K and I'd like to get around 75K out of it to combine with my other HELOC so I can start going after larger properties than the first few I've purchased. Would giving comps to the appraiser help or could it be seen as shady?? Any ideas?

@Christopher Winkler I've used Experian Connect in the past a few times. You set up a free account, put in the Tenant's (or whoever) name and e-mail and Experian sends them a link to go to. They then pay $10 to have Experian send you access to their credit report. Its cheap and doesn't require any site inspections etc. Might be something for you to check out.

@Bill Gulley Yeah, I've learned my lesson on getting a 15yr vs. 30 yr (unless there's some very specific and compelling reason to). I like how quickly the principal is being paid down but in the end it would be more beneficial to make that decision (pay more principal) myself on a monthly basis if need be. Thanks for the input.

Bump

I'm planning on going to grad school next fall and will be leaving the active duty military. In preparation for this I'm trying to reduce living expenses and debt before I get out in August of 2015. I recently (June) sold a rental I've had for a little over 10 years. I used the proceeds from the sale, savings, a personal loan, and a personal LOC to purchase a foreclosure as a personal residence:

Purchase Price & Rehab: $85,000

ARV: $120,000

Remaining LOC/Loan Amount: ~$29,000

Combined Monthly Payment (w/o insurance & taxes): $625

Monthly Insurance & Taxes: ~$216

My original intent was to sell my previous residence to pay down 10-15K of the 29K I have remaining in loans on my new residence and obtain a HELOC on it to fund flips while I'm in school. Previous residence:

Purchase Price: $169,900

Remaining Loan Amount: $136,275

Terms: 15 year @ 2.75%

Monthly Payment: $1,299

Projected Monthly Rent: $1,200

Here's the question: Should I sell the property and eliminate the 29K in loans/PLOC with the proceeds and my personal income or should I refinance on a 30 yr and keep the property as a rental? I bought the house as a new construction in 2010 (yeah...I don't plan on doing that again) so I **shouldn't** have any major capital expenditures in the next 10 years. Some more about me: I have no other debt, my wife has about 6k remaining on her car payment and another 9k in credit card and personal loan which should be paid off in the next 2-3 months. I also own another SFR free and clear that cash flows about $315 a month after taxes.

Interested to hear others' perspectives...

@Michael Ford welcome to the area! @Antonio Coleman I'd love to round up all the BP folks in the area and fill each other in on experiences, goals, etc.

First, I would actually call the doctor that gave the note and verify that the doctor is licensed properly and that they do indeed need the animal(s). I find it hard to believe that a legit doctor would sign off on "2 therapy cats" and if they did they might think twice when you call or further investigate. There is nothing wrong with you verifying this and it may show that you are concerned with following the letter of the law in the case of any future legal issues.

Second, it would seem that your husband (the property/business owner operator) being allergic to cats would be enough to deny accommodation. Or perhaps you could allow the animal if the tenant agreed to pay your husband's Allergist bills for the duration of any issues in the future (i.e. until you no longer own the property) thus showing that you are prepared to offer reasonable accommodation.