All Forum Posts by: Jeff Dulla

Hi Luis,

This is an interesting strategy. I just read through his website and I do understand what he means about the mortgage being paid off sooner. Essentially, since a HELOC works like a credit card, as you pay down the balance, the interest will be less and less, which allows you to pay off the loan sooner.

The one thing I would be leery of is that most HELOCs are based on Prime Rate, also known as the Federal Funds rate, and the rate is adjustable. As of late, Prime Rate has been trending upwards. The Fed has indicated they are going to continue to increase this rate. As this rate increases, the interest on the HELOC will be impacted.

The benefit of a 30 year fixed loan program is the interest rate is fixed for the life of the loan. You still have the option to pay more with a 30 year fixed loan to pay off the loan sooner and you will not be subject to later rate changes. But, like Michael points out, you do have the possibility of paying more in interest, as compared to his strategy with a HELOC.

Hi Kevin,

FHA mortgages are not meant to finance investment or second homes, they are meant for primary residences.

If you are purchasing the house as a primary residence (to live in), for a multi-unit, an FHA loan would give you more flexibility with down payment. A conventional loan, because of the property type (3-4 unit), would usually require 25% down payment.

If you're intending to occupy the property for at least a year, and want more flexibility with down payment, it would probably make more sense to use FHA financing. Although you'll have higher mortgage insurance premiums, you could always choose to refinance later to a conventional loan once you have more equity in the property.

@Marci Stein The numbers above are close but here is the actual guide from Fannie:

@Mike Russo Not sure if you really want it to be someone local. If not, the guy is @Brandon Hall - he is a member of BP, a trusted professional and has the niche - real estate CPA. 

@Dustin Albers - I work with a team of realtors in Chicago that are knowledgeable, top producers that I have run all of my own deals through. Just PM me if you would like a few of their contact info.

When you say North Chicago, are you talking about the general geographic location or actually North Chicago?

@Pierre Alvarez - Is there anything difficult about the deal? If not, I would not go to a community bank or bank in general. I would work with a mortgage bank or brokerage. I am completely biased but a mortgage bank controls the process like a bank will but will shop interest rates and programs for you. That way you aren't just pigeon-holed to whatever rates Community Bank of Miami or Suntrust or whoever are offering. A mortgage banker can shop thirty some odd different banks for you (or more). 

@Kyle Woltersdorf PM me some details when you have a second. Current value, proposed value after construction, construction costs if you have those laid out, etc. The more info, the better. I will reach out to some of my GC contacts who would be interested in partnering up. 

@Kyle Woltersdorf How are you searching for these deals? Do you have a seasoned realtor or are you doing it on your own?

I definitely have some some GC contacts. The only problem right now is that construction is still busy. I think many of these guys who are really good are going to have some major schedule/timing issues. 

What kind of loan are you trying to get on this?

@Elbert D. Definitely but there are some successful, hard working families in that area. Parts of it are changing a bit as a lot of these hard working households see success. It may not be ideal for some investors but you should find some more cost effective pricing there. And depending on how much Berwyn changes, could see some spread into Cicero. 

@Kyle Woltersdorf - What do you need help with right now? Structure of the financing? Best strategy for moving forward? Are you planning to house hack? 

Totally up to you but I am here as a resource. Just let me know.