All Forum Posts by: Luca Giani

Wouldn't get your hopes up about a HELOC on a rental.
- Most lenders will only go to a total of 65% , including your first mortgage.

Hard Money doesn't really make sense in your case.

Personal loan, credit card, etc. probably makes the most amount of sense, but make SURE you have a payoff plan!

Something no one mentioned yet - it appears you plan to do $20k improvements on an exiting rental. WHY?
- That seems pretty high.
- Curious what specific improvements you plan and when your calculations show you will recover this investment?

Hi Luca in Costa Mesa, CA-

You have an investment property with equity in Michigan and wonder the best way to finance 20K in renovations to improve property value and cashflow.

I would look at a Home Equity Line of Credit and the University of Michigan Credit Union did offer this on a single investment property.

The next best option is a cash-out refinance and you can do this with a DSCR (Debt Service Coverage Ratio) loan using the income from the property to qualify. There is a local lender I can refer you to.

Both options are fairly quick with reasonable terms.

To Your Success!

Luca, I'd personally avoid refinancing if your rate is lower. The loan amount you're looking for is small and you should be able to get the cash another way.

Do you have a 401k? If so, you may be able to borrow up to $50,000 against it. I've done that in the past and it's a great option. Generally, repayment is monthly over a 5-year period and all interest is paid to your self.

If not, a great option I've also used in the past is LightStream Capital. They're similar to hard money in terms of rates but they offer more flexible payback periods. You can get loan terms up to 5 years. I've done $50,000 loans with them a couple times and the process is super easy, all online, and had the cash in my bank within 2-3 days.

Hope that helps!

Capital stacking is a great lever to use

I would look into other property managers that help out of state investors. I have not been in this situation, but I would do your research and find someone that you can trust even if it means flying into the state and interviewing the property managers yourself. Losing money is not fun and it sounds like you have to go get it situated before you keep bleeding money and not knowing where your money is going

You may need another team member - someone to manage your construction. Your property manager's comfort zone apparently doesn't extend to the larger project you'd like them to take on. As much as they'd like to keep all your local property-related business, property management and construction management are two different beasts. Finding someone with that aptitude may resolve the problem.

If you can open the line of communication once again, have a conversation and find out if they're capable of finding a general contractor to wrap things up. If they're unwilling or unable to do so, take that task on yourself.

Assuming you can clear the air, let them continue doing what they've done well for you in the past - property management. If they won't respond so you can have the conversation about finding a GC, it's time to move on, and find someone to replace them as property manager.

Hopefully you'll be able to put a period at the end of the sentence without too much pain - either financially or in the form of further delay.