All Forum Posts by: Benjamin Manibog

I have an investor that just signed a purchase agreement with a seller. The investor agreed to put 300 down and the seller carry a loan for the remainder. After the purchase agreement was already signed, the investor requested an amendment because he needs to get a loan for the down payment. This means that his lender for this loan would be in 1st position and the seller would then be in second position (am I correct?). 

The seller hasn't agreed to this yet, but I wanted to ensure that I was correct. Likewise, if the investor stopped paying the lender (and defaults on the loan) but kept paying the seller that's carrying the loan, what happens to the property? Does the seller gain the property back or does the lender in 1st position? 

Thank you for your time with this. 

@Erin Free please DM me. I am military and live in Murrieta/Temecula.

@Erin Free

I recommend to not try out of state investing until you purchase property where you currently live. Using the VA loan is a great way to acquire property with paying zero down. I would really consider researching the market in the area near your base and compare it with homes an hour away (and everything between). I am stationed in CA and the homes near my base were very expensive and you get much less house for the cost. We decided to purchase an hour inland, where the homes were not only more affordable but the area was projected to grow and the appreciation was expected to go up dramatically. Our decision truly paid off because our home has more than doubled in value since we bought it eight years ago and its continuing to go up. Do your research, look up "opportunity zones" and find out which areas are going to be growing. Many of my friends bought homes in other states near military bases and the homes have not appreciated in value at all.

Moreover, do the house hacking if possible. It will really pay off! That is something I wish I did years ago. 

@John Warren Thank you so much for the advice! I especially appreciate the tip on using the refi on the property to pay off the HELOC.

@Aaron K. Thanks for responding. Is that the case for all areas in LA when using a HELOC or just there? Is it because the price is too high or what's the reason? Moreover, is there another area you'd recommend in Riverside?

Thank you for your response and for your insight. I think using it for flipping or BRRRR is a great option. I will definitely consider that.

I'm looking to do the same thing by leveraging my equity in my home; however, I was advised to only use 25% of my equity for a down payment in the event of depreciation. I've never done one before either and actually just asked in a separate forum for advice before seeing your post. 

It does sound like the lender wants to just get more from you by having you do a refi, which will put money in their pocket with their fees, on top of you doing your HELOC. I was advised to do either one or the other. The advantage of the HELOC is that you can borrow the money as you please, vice the refi you'll just cash out and you pay it back with your mortgage regardless. Moreover, the disadvantage of the HELOC is it can have a low starting interest rate, with a variable monthly rate based on the outstanding balance, vice if you have a fixed rate loan when you refinance.

I currently own a home in Riverside County, California (East of Los Angeles). My house is appraised at $450k and I owe $240K currently. I was reading about doing a HELOC in order to make a down payment on another property. I was considering only using 25% of my equity to be safe. Thoughts?

I am considering purchasing a multi family property (not identified yet) in the Los Angeles area near the University of Southern California (USC) or in South LA, and renting out the property. I will not be house hacking. 

Can someone with experience using a HELOC let me know if it was beneficial or if anyone had a negative experience?

I really appreciate everyone's time and feedback. 

@Shiloh Lundahl I really appreciate you taking the time to respond to my post. You made a lot of great points. I am a self starter and take the initiative to get after it with little support; however, I believe mentorship is important. After considering what many people have written on here, I decided to not pursue that particular program and will attend a local REIA meet up a few times and build my network before I pay for anyone's help. Moreover, I like what you said about not going into debt to pay for the program. That is exactly what my friend did (i.e. payed with a credit card). Thank you for your time and I look forward to learning more from you and others in BP.