All Forum Posts by: Dennis Muno

 Hello Salvador,

HELOCs are usually the popular way to go. They allow you to pull out equity from your home to go do projects that will be cashflowing. For HELOCs on investment properties lender allow the HELOC amount + current mortgage(combined loan to value) to be a total of 70-75% of the home value. 80% combined loan to value when doing HELOCs is not common but there may be a few lenders that may do it. Usually a FICO 660 and above improves your chances of finding a good HELOC

Once you get the HELOC you are able to draw out of the HELOC and do projects. Usually, interest rates on money taken out of HELOCs are usually variable, while money not taken out of the HELOC usually does not have a variable rate.

Hello Michael,

Depending on your FICO, the units in the property and if the property is (all tenant occupied/mixed use) there are lenders who may be able to do a 80% LTV, 25+ years amortization. That being said, every lender who can do this might be looking for a higher FICO for an 80% LTV

 Hello Dennis,

Usually 70-75% is the max option for a cashout refi. It is not common but there *may* be a lender who will go up to 80%. Is the condo a personal residence or an investment property?

Given that there are two liens on this property, almost no lenders will want to be 3rd place. Meaning, you'll need to do a cashout refi which would take care(payoff) of the two liens(current mortgage and HELOC) for a cashout refi . I don't know how this would work with the HELOC attached but these are the sticking points that come to mind so far.

Hello Anna,

So for loans like these you usually will need at least a guarantor. Make sense from a risk reduction point to lenders. However, the only way to know if a no guarantor hard money loan option exist would be to call many hard money lenders and I ask. I doubt it but only way to know would be to make some calls and ask.

A HELOC seems like a better idea if you have good enough equity in your current home. With rates high right now, if you can pull some equity out of the property to use as downpayment for another property that will cashflow nicely, that is a good idea in contrast to selling your home and possibly buying one with a much higher interest rate.

While this may be a little more difficult, there are lenders that do this depending on if the property and financing sought meet their guidelines. Things like your FICO, equity in property, etc will factor into the availability. Keep in mind, any lender as second position takes a greater risk hence your loan pricing and interest rate for the second position will be a little higher.

Hello Adam,

The only way possible is to partner with your partner. Even with that, what is his experience? Experience seems to be the biggest hurdle here. Has he been an investor for many years? How many  investment projects has he done in the last 3 years with his name on title? Does he have experience in larger unit properties like this?

Private money is an option but the experience of your partner will be absolutely key. What do you plan to do with the property if you were to buy? Rehab and hold? Rehab and sell? Buy, no rehab and hold? This seems like a long shot but if your partner has more experience and you can get another investor too your chances could increase of getting funding. Given that you only have one SFR right now, your friend's experience will be most important. Even with that, is the property already rented out and cashflowing?

While the outlook for financing looks bleak: if you can get other investors who are experienced the chances of financing look much better

Hello Ryan,

Depending there are some lenders who **may** do loan like this. It may not be an FHA loan though but a conventional loan. However, the loan availability will be lender specific. Due to the credit the possibilities may be limited due to the FICO and your rate will certainly be a little higher due to the FICO

Hello Doug,

So it seems there are many ways you would like to go:

1. Leverage equity from both you and your mum's homes to buy the new property?

OR

2. Sell both properties to get into rentals.

I know of bridge loan options where you can buy a home before you sell but I'm not fully sure how that would work with both you and your mum selling your homes to buy an investment property this way.

 Hello Cory,

It appears the way forward will be that it will be your brother and his wife's home purchase. You and you wife could help with funds which will be indicated as "gift funds" during the loan application by the loan officer. 

However, if you are donating with the idea of also being on title with all four of you as owners, this seems like a "joint ownership" scenario. Depending on the lender/ loan product you may or may not be able to qualify for the loan.

More info I got online about this:

https://www.bankrate.com/mortg...

https://mymortgageinsider.com/...

https://maresmortgage.com/join...

Talk to a lawyer as well as a highly experienced loan officer near you who has done this before. Keep in mind, if you proceed this way, all four of you will need your documents checked and credit pulled to apply and be scrutinized before approval