All Forum Posts by: Landon Miller

Deciding to renovate my personal residence instead of trying to buy in this market again (Denver). Rates have gone through the roof so I am trying to research the possibility for a 2nd lien construction loan. I want to keep the rate on my 1st but need money for an addition (adding master bedroom/bathroom/kitchen remodel/ updating flooring and probable sewer line). Trying to keep it smart and have the total notes outstanding to 80% ARV.

That seems to be the kicker with a standard Cash-Out that the lender won't use ARV and I was steered towards construction loans, either way I just want to keep the rate on the 1st but need a lender who would take a 2nd lien using ARV values, still staying at 80% total loan to value.

Does anyone have any experience with something like this?

@Ben Rhodin I would definitely need more clarification from an LO on the refi options, I currently have funds for a new primary (half portion with my gf and we would be looking in the low 400 range) and that doesn't stretch too far in the metro area as you know.  In any way refi or sell I want additional funds to invest, the refi seems like I need to convert to an investment property so I am not locked in living there for another year.  If I sell, I would have interest free funds as opposed to being even more leveraged.

But I want to be risky and believe "I'll get a renter within a month being 5-10min from downtown" but I know its not as easy as that.

I want to keep it but... With a sell and splitting the new primary, my half would be less than I am currently paying for my mortgage, but is out of state investing going to be even harder than trying to make my current primary work as a rental?

I keep talking myself out of each path

@Ben Rhodin I work at a mortgage company I just haven't sat down with an LO as I wanted to have a bit clearer path of what to do.  I wanted to Refi to pay back my parents and get a little discount on my current rate but realized our Refi's require to live in the Primary for another 12 months, I don't think I can swing it here until next Oct-Nov.

No updates seem truly "necessary" right now except for the siding/painting more so to demand higher rent, but I think I am falling into the trap of trying to update too much when the area (Alameda & Federal/ Westwood if your familiar) it isn't necessary.  Zillow rental estimates are nice but I have thought about contacting some PM companies to see what they think it could rent for as is.

@Tanner Crawley As I understand it, I will be tax free since I won't be making over 250k profit, and nothing else I could offset.  Wouldn't you be able to write off PM fees anyways as a cost of business? 

Good Afternoon (sorry this is long but want to give a full picture)

I bought my first house here in Denver Feb 2020, my budget wasn't huge so I have a 640sqft (2br1bath) single family with a large yard in a C class (assumed) but improving neighborhood. There were some interior updates done previously (updated kitchen, flooring, windows), but much better than many in the price range. I have been updating since day one and many ideas for additional projects as I wanted to convert to a rental, refi to pull cash and buy a bigger primary with my GF (she is not an owner on my current).

I believe to get it rent ready (next summer) I would need about 14-16k more and then if I factor in AC/Furnace we're creeping into the 20k range (house has asbestos siding panels and the broken ones need replaced and then get the house repainted 6kish or I have it covered with vinyl which kills two birds but probably 2-3k more at 9k). Roof will eventually need repair as well as sewer line (not immediate but definitely within 10 years)

We need to move... and I can't decide what is a better option.. Sell or try and push through and get it rented. I am pretty confident the property would cash flow $100-200 after paying a PM (not dealing with renters) so essentially cash flow $ 0 - 100 if I factor in saving for repairs.

I want to keep it as a rental especially for the appreciation (say what you want but Denver will always be outgrowing most places in the middle of the country) and with the neighborhood slowly improving. But I can't escape the reality that currently I do not make enough to float periods without renters while splitting a mortgage on a new house.

If I were to sell, doing minimum repairs (I don't think I can escape 8-15k worth) I should be able to walk away with about 50k (closing costs/commission already paid), and after a new downpayment/savings/money for updates I would have about 20k free to look for Cash Flowing out of state.

What would you do?