All Forum Posts by: Bruce Martin

My only experience in getting a HELOC is with a smaller local bank that operates in my area of SC. They have 7 branches and I have had a couple of investment property loans with them at the time of getting the HELOC. I wouldn't necessarily say it's more important to use the same institution but it might help you out if you have a track record with them. The loan officer did tell me that they typically don't do HELOC's on rentals but would since I had a history with them. I don't know if he was just telling me this or not. In my case, I had a paid off rental and they offered a line of credit for 60% of my equity and the current rate is 4.5%. There is a 10 year draw period and I only have to pay interest only until then. There was no appraisal to set up and I think there was about a $300 recording fee.

@Alexander Felice Thank you!  I'm definitely outside of the 1.3 price/rent goal.  There is definitely some overbidding going on in Fayetteville!  This was the sixth one I bid on and some of the others would have been worse on the price/rent percentage than this one.  People are definitely driving up prices and settling for lower returns here.

@Chris Levarek - My plan is to delay financing as I have to start looking for a 10-31 replacement property so I'm more concerned about getting that taken care of.  

I went into this planning to leave money in it.  I knew I wouldn't recoup all of my money but leaving around $10-20k was what I had planned.  A loan for $100k should keep at least 25% equity in the property and still give me around $200 a month cash-flow.  That would have me leaving $21k in it.  I'm comfortable with that as that should be around an 11% cash-on-cash return ($2400 annual / $21k = 11.4% cash-on-cash).

It's not a home run by any means but I'm content with it.

@Justin Tahilramani I was considered going with the older brick ranch styles but decided against it.  I would be curious to hear about the competition you've had when buying these homes?  I was primarily bidding on foreclosure 3/2's built in the last twenty years and there seemed to be a lot of competition.

@Reggie Ramsey very nice! You had it looking good!  And you're attorney wasn't wrong with her prediction.  At least they didn't trash it on their way out.     

 It's rented for $1150.  

Investment Info:

Single-family residence buy & hold investment in Hope Mills.

Purchase price: $113,000
Cash invested: $121,000

This is my first investment property in the Fayetteville area. It is a 3 bedroom / 2.5 bath that's approximately 1450 sq. ft. It was a foreclosure and only required $8,000 in renovations to have it rent ready.

What made you interested in investing in this type of deal?

The ease of finding distressed properties that will cash flow. I'm particularly drawn to SFH's because they are easier to sell as ordinary people buy them, not only investors.

How did you find this deal and how did you negotiate it?

It was found through my realtor. Minimal negotiations because it was a foreclosure. They asked for the highest and best offer by a certain time.

How did you finance this deal?

Cash. I'm looking to get a mortgage or a line of credit on it.

How did you add value to the deal?

Minor renovations to include flooring and painting made the property much nicer. I also painted the home to keep the renovation costs lower. Comps have been in the $140k-$150k range so I like to think I created about $20k in equity.

What was the outcome?

Within 3 weeks of closing I had a cash-flowing property with tenants already placed.

Lessons learned? Challenges?

Overall, it went really smooth with no major hiccups. This was my first in this market so there were a lot of unknowns with the recommended contractor and property management but it went well and they have impressed me thus far.

I bought a townhouse in Reston for $350k two years ago and rent out the basement. I don't live for free but it helps mitigate my largest expense. It actually cuts my housing expense in half. I used a VA loan and put nothing down and now I could rent the property out and almost break even (not considering vacancy/capex/repairs). Appreciation in this area is great! This may or may not be something to you're willing to put up with but it's a surefire way to get started.

I figured I would chip in on this topic since I have a job I really enjoy.  I'm a Park Ranger for the National Park Service.  My daily commute consists of a boat ride to various islands off the Mississippi Gulf Coast where I get to ride around on four wheelers on the beach.  I've worked this job in a variety of parks and have had the opportunity to do what most outdoor enthusiast pay to do on their free time.  It's a great fit for me with a decent retirement.

Currently I'm up to seven doors.  Three are townhouses in SC that are managed by a friend who is also a realtor.  Very little effort is required for me to manage these other than printing off the rent deposits and paying the HOAs.  I'm exercising a buy and hold strategy here because it's home and I have ties to the area.

Four of my other doors are here in MS and I manage them myself.  There really isn't too much involved other than a little bookkeeping and scheduling of maintenance.