All Forum Posts by: Hunter H.

Hi All,

I've been a lurker for years but finally made the jump.

I have a property under contract in a highly desired neighborhood in Michigan. The purchase price is $160,000 but needs roughly $40,000 in rehab. The ARV is close to $250,000. This is being purchased with a conventional 30 year fixed rate mortgage, 5% down at closing. Post-rehab this should rent for $2200/mo and my expenses are fixed at $1000 (mortgage, insurance, taxes).

I'm trying to understand my options for accessing equity as I plan to keep this as a long-term rental. Due to the bank financing and overall nature of the deal, I'm thinking this is more of a HELOC property than cash-out refinance.

I'm getting caught up in calculating my usable equity after the rehab is complete and my property value increases. I'm not sure what happens to % equity in the existing mortgage if the property value increases but I haven't refinanced.

Ultimately, I think I'm looking for validation in pursuing this deal and hopefully advice on accessing equity after the fact.

Really appreciate any help.

Thanks.

Hello,

I'm a noob looking for advice on structuring a deal with private money. I can acquire a property for 22K that has a current ARV of 45K. To my knowledge, this is just below the threshold for most banks to issue a mortgage/refinance. I have not spoken to a local bank/credit union yet.

Seller purchased for 26K in 2011 and had a bad experience renting (from my perspective due to operational inefficiencies). Minor cosmetic repairs are needed and estimated at 3K. Seller is looking for 22K to pay the remaining balance on the current mortgage. Seller is a family friend and simply wants out.

It would be ideal to receive a 22K bank loan but I know that is very low for traditional mortgage lending. I have access to private money (friends/family) and am considering paying the 3K rehab out of pocket.

Do you have any advice on repaying a short-term private money loan, assuming a traditional refinance isn't likely? 

Thanks,

Hunter