All Forum Posts by: Account Closed

In addition to Wells Fargo, PenFed & TD Bank offer ELOCs on investment properties.

I'm sorry to hear this property didn't work out. There will always be other opportunities...

For the next property, try to buy with cash, rehab, put tenant in place, and then cash-out refinance with mortgage or ELOC to replenish cash reserves and/or repay acquisition debt.

To acquire the cash for the investment purchase, you can take out a HELOC on your primary residence (if you own your own home), personal loans from family/friends (if you have that option), or even 0% credit card offers (what I've done).

Best of the luck with the next one!

It's good to have back up funding sources when taking on a fixer...:)

If you have another Chase card, Slate isn't much different as far as 0% borrowing options. I have 3 Chase cards, the other 2 are Chase Freedom. One difference with the Slate card is it includes a tidy interface for monitoring FICO score (experian).

I've had people recommend Home Depot for contractors, but their quotes have always been higher than what I've found elsewhere. In California Angie's List was great resource for good contractors, in N.C. I've had better luck with word-of-mouth and Craigslist. FWIW, I've canceled my Angie's List subscription) 

If considering credit card applications, keep in mind the inquiries can complicate mortgage/ELOC  borrowing. I wouldn't apply for any new credit cards if I intended to apply for a mortgage or ELOC in the next few months...

With projects in this price range, I've used 0% promotional rate credit cards to help with cash purchase & rehab. Once rehabbed, and tenants are in place with signed leases, you can shop for longer term lending. The leases help towards mortgage/ELOC eligibility. Credit card balances don't count against DTI calculation if paid off in escrow.

I find Chase Slate, Citibank Diamond, and Discover the most helpful, in that order. They are constantly sending us 0% offers on existing accounts. This might not be helpful at this point in time since you are in contract, but down the road it's good to have options.

I hope that helps. Good luck!

Adding to the comments above, if you're looking out of state for buy&hold properties, in my opinion the property manager is the most important part of the equation. If you find a great deal, but don't have a great property manager lined up, then what? I'm very happy with property manager I use out in NC. If I ever wanted to buy in a new market, one of the first things I'll do is decide who will be managing it.

I did a 1031 exchange last year. I sold an underperforming rental to invest in a pair that showed much better cash flow. A couple of considerations for the OP:

1. You can defer the capital gains tax with a 1031 exchange, but you will be hit with 25% depreciation recapture tax. Google "depreciation recapture" for more details, factor that cost into your decision making.

2. If you sell a rental with a mortgage or other secured loan, you'll have to purchase your replacement property with a mortgage or pay tax on the reduction in liability. Google "mortgage boot" for more information.
3. There are costs will selling, the 1031 exchange, the mortgage on the new property. Make sure you're clear on all these costs when analysing your options. As others have stated, it might make more sense to borrow on the CO rental to fund the new NC purchase.

If you do a 1031 exchange, make sure you do it correctly. Contact your CPA and line up a "qualified intermediary". If you make one small mistake, you'll have to  pay tax on those capital gains.

I hope that helps.

Good luck!

I called Wells Fargo, they also do HELOCs on investment properties. A little more vague on some of the details, but also minimal holding requirement, up to 60% LTV, decent reates, etc.

https://www.wellsfargo.com/mortgage/loan-programs/home-equity-line-of-credit/

I just got off the phone with TD Bank. They definitely do HELOCs for investment properties. A few key data points: 1-day seasoning requirement, up to 75% LTV, up to 43% DTI...

https://www.tdbank.com/personal/home_equity_line_details.aspx 

Three options come to mind:

1. If you own your primary residence, use equity from your home to buy the investment property.

2. Borrow money from any source, just not secured by the property of interest. Then buy with cash.

3. You can do what I've done in the past. Use 0% teaser rate credit cards to fund the purchase. Google App-o-rama. 

I hope that helps. Good luck!

@Hill A. I've bought a few SFR in downtown Wilmington, NC in your price range. Most were bank owned, wouldn't qualify for mortgages, and needed some rehab - typically at least $10k in rehab, some more than $20k.

I think location is critical - I like to stick to properties and locations I'd be willing to live in. There are plenty of run-down houses on seedy blocks - I avoid those. I also rehab my properties to slightly higher standards - I like to attract better tenants, for hopefully less problems, less turn-over. These properties have worked out well for me.

I avoid Condos & HOAs for the reasons you listed. I like modest, but attractive, properties that will attract better tenants, I don't like issues with neighbors, high turnover, HOA restrictions, Condo fees, etc.

If you'd like a recommendation for an agent and property manager very familiar with less expensive Wilmington properties, I can highly recommend @Rachel De Faut. She was my buyer's agent for all my properties, and acts as my property manager. She also has contacts for rehab.

You can also message me with any questions.

PS Thanks for your service. Semper Fi.
Joe