All Forum Posts by: Jessica Piff

@Peter M.

This makes sense, it would be a line of credit with the home as collateral, but not necessarily a "HELOC". Thank you!

@Colleen F.

I will not be rehabbing this home. It's a fully rented property with long term tenants in there. I won't have a loan on it as I'm buying it outright for 35K. 

@Peter M. @Brad Hammond

Thanks for your responses! I am paying cash because the home is only 35K. I thought that I have heard you can HELOC an investment property, but perhaps I misread that.

Would I be able to refinance a 35K house? I'll be reaching out to smaller local banks this week to see what our options will be. 

I'm feeling a little intimated now that we're in the process of actually purchasing our first investment in the next 30 days! We are receiving a personal loan from a private lender (friend) for 35k. We've agreed on terms and are in the process of signing our loan agreement. 

My question is this: Once I receive the loan, can I just put it in my bank account and then immediately use the money to purchase the property? I'm using this loan to buy the property outright. The lender has said he does not want to be involved in the sale/purchase of the property, he just wants interest on his money. 

Please help! 

Is it possible to buy a multifamily outright with cash and then heloc it to recoup your money for the next investment?

Just an update. This whole zoning issue is worrying me too much and I've found another deal with similar cash flow where I can purchase the home outright with a private lender. I'm passing on the deal I originally posted this thread about. 

This post has two parts.

First, I'm looking to close on this 6 unit multi family and today my realtor said she found out that the property is only zoned as a 3 unit. I spoke with the owner and he said he bought it as a 6 unit two and a half years ago. I'm wondering what could happen if I buy this property knowing it's zoned as a 3 unit even though it is now a 6 unit. I'd be purchasing this property with seller financing. 

That brings me to the second part of this post. If I buy this property with seller financing, would it be possible to refinance with a bank before the balloon payment is due in 3 years? If that is possible, would I run into issues with the fact that the property is zoned as a 3 unit? On top of that, if I can refinance with the bank would it be a commercial loan due to that fact that it is actually a 6 unit? 

Also, as far as the seller financing terms we've worked out, we are doing a down payment of 25%, paying interest only payments and then balloon payment due in 3 years with possible extension to 5 years. I'm wondering what will happen when we try to refinance with the bank. Would the bank be looking at the total purchase price or the remaining 75% we have left to pay? And then would we owe the bank a down payment on that 75% or would they fund the remainder we have of the purchase price since we already put 25% down? 

I've scoured the forums and blogs and can't find any solid information on either of my dilemmas. 

I need to add as well, we want seller financing because we cannot get conventional loans due to lack of 2 years of tax returns. However, after this year we will have two years of TR, so that is when we would refinance to get out of the balloon payment. Hopefully this all makes sense. 

TIA!!

@Ronald Rohde

Hi Ronald, thanks for your response. I do have 10k set aside for closing costs and cash reserves if anything goes awry. It’s a 6 unit. I didn’t think about selling the deal, I don’t know anything about that or how to go about it. I will definitely look into it. Hopefully if I do my due diligence and get an inspection done I can avoid costly repairs up front. When analyzing this deal I’ve accounted for 8-10% for capEx, and repairs and maintenance as well, so my cash reserves for that stuff will only increase each month.

@Nathan G.

I put the word out there to friends and family. Although nobody has the full amount I’ve had quite a few unexpectedly offer to at least pitch in a portion of it. I am also looking for partners. My expectation is that whoever loans me money will hopefully continue to do so once I pay them back with a good return. Most people in my circle aren’t getting 4-8% interest on their money sitting in savings.

I’d prefer not to split the profits with a partner but would rather just get loans for down payments and then pay them back with higher interest. I want to overall build equity and have high cash flow in the start of building my portfolio to build more capital for more assets.

@Nathan Gesner

Thanks for your response. I asked the owner about seller financing and he is requiring an even higher downpayment. He is liquidating to acquire more assets himself so he really wants the cash. I'm wondering if it would be wise or a terrible choice to try to get a loan for the higher downpayment to do seller financing? He wants 40K down, amoritized over 30 years with a 3 year balloon payment (extension possible.) 

We just started new jobs that are bringing in plenty of income, but since we just started them, we don't have the back log to get a conventional mortgage. I do feel completely confident that the seller financing terms would work for us, but we just don't have the full 40K for the DP. 

I know a lot of people would say don't buy a property if you don't have the money, however we will have the money in just a few months, but I really want this deal now. I'm doing whatever it takes to find a solution. I've messaged family and friends and have offered them good terms to loan the money as well, but nobody I know has 40k lying around. 

Hi BP,

My husband and I found a deal we are really excited about. It's exactly what we are looking for in terms of PP, commercial multi-family, and high cash flow. We've analyzed the deal with extremely conservative figures and it would cash flow around $1000 a month. We really want to secure this deal with as little to no money of our own so we can acquire another property quickly. Looking for some advice on different options to get a loan for the downpayment (30K). 

Thanks so much!