All Forum Posts by: Corby Goade

I posted this question in the financing forum, but have had no replies, so trying again!

I recently bought a duplex with cash from my HELOC, and am looking to cash out the property to pay off my HELOC and do it all over again. It's been four months since closing, so I have two months to go before the property is seasoned and am exploring the Fannie Mae Delayed Financing option.

Has anyone else done this? The quotes I've recieved in the last couple days are around 5-5.25%, is that the going rate for this product? Is there a rate premium on delayed financing, or am I getting the same rate I would for a seasoned non-owner occupied cash out? Thanks in advance!

Hey @Bradley Adams, there are no dumb questions! However, if you can, it's best to buy the property for cash up front- it saves you from having to pay the bank closing costs twice. It gives you a great deal of negotiating power too- many buyers will accept a lower cash offer over a higher financed offer. If you pay cash, you can also refi right away. If you can't pay for the entire thing in cash, then yeah, you have to pay those costs twice and wait six months to season the loan before you can refi. 

Keep in mind, if you use a HELOC on your personal home, banks consider that a cash payment.

@Account Closed, great advice, I wouldn't have thought of that. 

I've only been through this once, but I brought everything I had. Leases, photos, email exchanges, phone records, etc. The judge literally flipped through my photos like a flip book and ruled in my favor. Took all of 60 seconds. That was seven years ago and I still haven't seen a dime. I know, shocking, right?

@Scott Radetich, I closed a loan with Consumer Direct last year and have more than 4. That said, experience was decent, I've had WAY worse experiences with online banks. I'd try them again. 

I am not aware of any conventional HELOC options on non-owner occupied properties. I would guess that you'd need to either do a cash out refi or portfolio or private lending.

As for the BRRRR method, the idea is that you buy right and make necessary improvements so that you have 25% or more equity in the property when you have your appriasal done. When you refinance, the equity is your "down payment." You do a cash out refinance for the other 75% or so, take the cash and start all over.

I am doing exactly what you are asking about in your original post, I just use the HELOC from my personal home. Best of luck out there!

I would give the tenant a warning and modify your lease- make a mention in there that tenants are no to rekey locks and it's a violation of the lease terms (thanks for the post, I am going to add this to our leases now!) If they are a good tenant otherwise, I'd change the locks back and maybe give your tenants one free door opening per year?

We use a master key system for our rentals, so having a tenant change a lock would definitely be a problem for me.

We specifically have in our leases that they cannot paint for the exact reason you have described. Some of them still do it anyhow, but we hire someone to paint it back and take it out of their deposit when they move out. Our lease states that they cannot make any changes to the house without our written permission. If you allow tenants to paint, change fixtures, etc, 99% of the time it will turn out badly for you, and you may have liability for their work. I doubt the ability for tenants to paint attracts better tenants, so I can't see how it's of benefit to a landlord, just creates work, expenses and bad feelings.

I recently bought a duplex with cash from my HELOC, and am looking to cash out the property to pay off my HELOC and do it all over again. It's been four months since closing, so I have two months to go before the property is seasoned and am exploring the Fannie Mae Delayed Financing option.

Has anyone else done this? The quotes I've recieved in the last couple days are around 5-5.25%, is that the going rate for this product? Is there a rate premium on delayed financing, or am I getting the same rate I would for a seasoned non-owner occupied cash out? Thanks in advance!

I've got a few conventional mortgages and need to start seriously exploring private or portfolio lending. I've seen some of the commercial portfolio lenders out there and am generally familiar with their terms, but what have you seen or been able to secure? I'm a buy and hold guy, and am generally looking for long term loans for small multi family properties. Feel free to comment on as many or as few of the topics below that you like. 

-Private, bank or credit union?

-Property type?

-Amortization?

-Balloon?

-Down Payment?

-Rate?

-How was rental your income calculated, if applicable?

-Did you cash out any equity to make your down payment? How did that process work?

-Qualification criteria such as DTI, required reserves, credit score, etc?

-Finally, how much did your relationship with the lender play into your deal? Are there other important details that could be helpful?

I just feel like I don't know enough about this private lending world or what the market is like to move forward and make an informed decision. Thanks in advance?

I'll let my tenants do some basic yardwork/landscaping, as long as they request what they want to do and get my approval in writing. Carpet, paint, electrical, basically anything inside, no way. There's a ton of liability and you put yourself in a position where you are negotiating with your tenant. Once you give in on a paint color or carpet style, why not negotiate rent or late fees? Liability aside, it's a slippery slope. Our policy is that we don't do business of any kind with tenants beyond cashing their checks and being a good landlord to them. Anything more can complicate things considerably.