All Forum Posts by: Justin Phillips

Congrats on the deal! @Kaybreh Mathis

@Tesho Akindele Hit the nail on the head. As an agent, she'll love it, as she gets to double dip. Don't worry about the negotiation process, she's a saleswomen, she'll frame it in a very favorable way. It's always great when you're able to align interests with others.

@Stacy Voss @Kevin Romines Nailed it! If you qualify, and the numbers work, I don't think there's a better option out there! 
My wife and I used this on our primary that we later turned into an investment property. I loved it so much that I left my job in Medical sales to join a broker that specializes in this loan. It's great for investors, as you can use idle cash to pay down principle and save interest. Then whenever a good opportunity arises, you can simply write a check out of your credit line and purchase in cash. Each additional house pays off faster than the last with the additional cash flow. 
I'd say you're making a great choice! 

Edit: Double Post

@Dan Schwartz Hey Dan, we only offer that one specialized loan type. You don't need to utilize the ZBA (Zero Balance Account) as your main depository though. We have clients that just use that as their rental property's checking account. Although, it's definitely nice when you can let idle funds work for you.

I help a ton of clients put 1st position Helocs on their rentals, and I have one on my own. I can't recommend it enough! We're licensed in CA/AZ/CO, but the loan style is available in every state. 

@Reuven Krumbein As @Fred Shatzoff said, I'd definitely just try to collect some further details. It could be as simple as the current owner wanting cashflow or tax benefit. However, it may be possible he's hoping to get someone who will eventually default. It's not necessarily a red flag, but I'd do some digging. 

Hi Christopher, congrats on taking your first steps on your REI Journey!
I took the same route as you, converting my primary into my first rental. While it was still a primary, I ReFi'd into a 1st position HELOC. That allowed me to get the primary residence rate, and access up to 80% of my equity. Along with that, I no longer had a mandatory monthly minimum payment, just an interest only cost. It allowed me to really wait and find a well qualified/good fit tenant. It's been great, I'm cashflowing well and I can write a check from my line for an additional property purchase at any time.
Your concerns: 
1. In my experience, you shouldn't have much trouble moving to an LLC regardless of loan type.

2. Depends on your lender/underwrite. A strong lease will definitely help, but without past rental history it may have any impact. 

3. Definitely always good to have some money available as as safety net. Heloc is a great option because you only pay for the cash if you need it. 

I wouldn't recommend that method. You always want to align goals. If you want the property completed ASAP, but he has a free/cheap place to live as long as work needs to be done, I don't see that ending well.
Always incentivize your contractor for doing quality work, in a timely manner. That way, everyone is working towards the same goal.

@Loon Da With underwriting/Processing/Title/Escrow/appraisal, there’s not going to be a ReFI option to a lower rate with nothing paid at all.

There's always going to be costs, it's really just a matter of ROI on those costs. If everything is rolled in, the cost will be in the form of a higher rate. The broker/bank has to profit somehow.

What’s your current rate? That’s a good place to start to see if it makes sense. Then from there, you’ll want to see how long it will take to pay for the associated costs.

@Patrick McCandless That's so strange, especially if it sounds like you have solid comps. It may just be their way of staying extra conservative on it. So at this point, it's probably just a matter of ROI on that appraisal fee. It sound like it will make sense based on that appraisal from a month ago, and the lower rate.
I would definitely recommend checking out a first position HELOC as well. My wife and I got one on our little Investment Condo in SoCal, and I liked it so much that I left my job in medical sales to join the company. It has some great benefits for investors.
Either way, can't go wrong opening a Heloc at these values!