All Forum Posts by: Corey Collins

Hi all,

Thanks for taking a minute to read my post. I'm trying to figure out the best way of how I can use my VA loan to purchase my next property. Here is my current situation:

I own and live in a SFH purchased with VA loan 3 years ago. The loan is a 30 year fixed at 3.25 %. I could reuse the VA loan for a second mortgage but the details are a bit murky from what I understand. Also, the loan guarantee amount would be significantly lower since I still have my 1st VA loan. My goal would be to purchase another small multifamily (2-4 unit) and house hack for another year (just got done doing this with our duplex purchased a year ago).

The way I see it, I have two options. One, sell our current home, free up the VA loan, purchase a new property, fill a kiddie pool of cash from sale proceeds and enjoy. Two, refinance home into a conventional loan, use VA loan to purchase a new property, rent the previous home, forgo the kiddie pool but enjoy the increased cash flow.

All that being said, am I even able to refinance since it would likely be into a higher interest rate? If so, is it even worth it? Is there another option that I'm not considering?

Thanks in advance!

Thanks @Account Closed

I really appreciate the help!

Thank you @Wayne Brooks and @Account Closed

Do you think by changing the insurance to the name of the LLC this would trigger the lender to call the loan due? From what I've read they don't seem to mind so long as everything is paid for. That all said, from their perspective it may be hard to ignore when the insurance states a different name.

Hi everyone,

I have a newbie question regarding purchasing a property through conventional financing and then quit claiming it into an LLC. I am aware of the risk of the loan being called as a result. However, I'm curious when/how (or if) the lender is notified when changing the title.

Two hypotheticals:

1) This seems more typical: A property is purchased and titled in a personal name. Soon thereafter it is quitclaimed into an LLC. Is the lender notified of this transfer automatically or would they have to specifically search for this information? How long would you typically wait until transferring? Immediately or after some time?

2) This seems potentially problematic but I'm still curious: A property is purchased through conventional financing and titled into an LLC immediately at closing. I feel like this would be pretty clear to the lender and could cause some problems. Still, worth asking since I'm not sure what they are notified of.

Thanks in advance!

Thanks @Brent Coombs , that is really helpful. I wasn't sure how the whole refinance process worked so it's good to hear I should expect a 70% cash out of projected ARV.

As far as weather, we've seen better days. Where I'm at most power/water is back on but there are many still without. We're one of the lucky few to have both. Hopefully we don't have to deal with anything like this again for a long time!

Hi all,

I'm putting some final touches on my plans to purchase my first BRRR property. I wanted to cover a couple aspects and see if anyone can help tie up loose ends. Most of my misunderstanding/questions pertain to financing so hopefully I can get some help there.

Buy:
From my understanding, this should be a cash purchase. I will likely have to deal with a hard money lender. Alternatively, I have owned a separate LLC for 3+ years which could probably qualify for a large enough business line of credit to purchase outright. That being said, I wouldn't want the LLC utilizing the line of credit to own the property long term (too much risk once renting). I'm not sure if I would be able to transfer the ownership to a new LLC if purchased with a line of credit or even put into an LLC once refinanced.

Rehab:
For a first deal, I don't want to go too crazy with the rehab. What renovations do you BRRR experts feel give the most ROI on appreciation and rents? Also, how much forced appreciation is realistic in terms of a percentage to rehab costs? I feel comfortable with basic work such as paint, floors, kitchen upgrades, and maybe adding a bedroom/bathroom with the help of a contractor.

Here a rough example with figures I just made up:
Purchase – 120k
Rehab – 15k
ARV – 170k

Forced appreciation on rehab – additional 35k or 233% of rehab cost

Does this sound right or way off?

Rent:
Probably worthy of a good discussion but not the main focus of this post (yet?).

Refinance:
Ok here is where I begin to feel most uncertainty. For example, let's just say I purchase with hard money. I would have a lender lined up prior to purchase who would be willing to cash out refi on the property. Since the property would have originally been purchased cash I would expect to receive roughly 70-80% LTV on that cash-out. I would then take the refi funds and then pay off the hard money loan and recoup the personal investment.

How difficult is the refinance process? What are the steps involved? Do I need to hire an appraiser to come appraise the property after the renovations are completed? I can imagine how devastating it would be to get a great deal but get stuck with a hard money loan long term because you can’t refinance out. Anything I should look out for besides speaking with banks PRIOR to making a purchase?

Repeat:
Do it all again!

Am I missing anything vital? I know it’s a lot of questions upfront but I can think of no better place than here to find the answers I’m looking for.

Thanks in advance!

Hi Everyone,

I have a question regarding a financing option that I may have. Currently, I have a business that has been in operation for over 3 years with a good history of revenue/profit. I've had a business credit card for a couple years but have yet to apply for a line of credit since the need never arose. Until now, I never thought about being able to use my current business as a way to leverage purchases.

Here is my uncertainty. I would need to have a large enough line of credit to pay a down payment and fund renovations. Then I would need to figure out financing for the remainder of the purchase price. I would assume this would be through the business as well. Additionally, I would want to transfer this property to a new LLC solely for the property to protect my original business in the future.

So, in short. Has anyone purchased a property through their business with a line of credit? Also, has anyone transferred a property from one LLC to another and what does that process look like?

Thanks in advance!

Thanks for commenting @Upen Patel and @Marshall Martinez,

From my understanding I would be able to apply for a FHA loan (2nd loan) even though my current loan is VA. To your knowledge, is that correct? If I were able to acquire a FHA loan I would use the 2nd property as a primary residence and then rent out my current VA loan home. I have lived in this home as a primary residence for one year.

Does it sound like I'm on the right track? If not, please feel free to let me know.

Thanks!

Hi everyone,

As the title states, I am looking to purchase a 2nd home that could either be used as a new primary residence or a buy/hold rental. My main concern is working around VA occupancy rules. Ideally, the 2nd home would be a larger home or a multi family that we could move into (Me, my wife, and infant child). If that were the case the original home (VA loan) would then be used as a rental.

What are my options for this type of loan? Would it be best to refinance the VA loan into a conventional and then reuse the VA loan? Is an FHA loan possible to use on the 2nd home? A down payment would be possible but would like to keep it as low as we're able.

It would be great to hear from some experienced investors who have been in a similar situation.

Thanks in advance!

Hi @Dennis VanHouten, thanks for following up. I should have clarified that I will be using a conventional loan with 20% down for future purchases. You can only have one VA loan one at a time and it must be a primary residence. The home that I am purchasing now with the VA loan will be my primary residence for years to come as my wife and I are starting a family. I suppose my main question would be pertaining to if there is any time limit I must wait between applying for my VA loan and applying for a conventional loan. Thanks for the input so far!