All Forum Posts by: Luis Prieto

@Amanda Kessler So what you are saying is that I can't get a HELOC out of a pre-existing outright owned property to use for the build of a new home? Just to clarify, we would be getting a HELOC on a pre-existing home that my brother in law owns outright.

@Tim Johnson Thanks for the suggestion. I should had mentioned that he is trying to get a HELOC on an existing home that he owns outright.

Hey guys and girls. My brother in law and I plan to start investing by building new homes. I have a friend who used to be a home builder who can build me a 2000 as fr 4bd 2.5 bath home for 100k. I found a lot that I really like in my town that is 1.25 acres on top a hill with a view. Similar sized homes in that neighborhood are worth 380k+. So what I am thinking is buying the lot (listed for 39k but been on the market for a year) for 30k and having my friend build me the house for 100k. If this happens, we should have a lot of equity since it'll be ours outright, and then we will use the 380k of equity to build new properties since it's chesp to do. Anyway, my brother in law called his bank, and when they asked his intent for the money, they recommended a construction loan instead. He is trying to get a HELOC on a home he owns outright .We obviously don't want to go that route since we will be obligated to build with a contractor and it will cost us much more, to the point where it doesn't make sense. So my question is, how can we go about getting the HELOC for our purpose? This may sound like a dumb question, but we have never done this before.

@Paula Mason, I'm with Brett on this one. I would try to explore the FHA route if possible. If not, I'M look into a HELOC on the duplex for the down payment of another property. What price range are you looking at for your to be primary residence? 5% of 200,000 is only 10k, so a HELOC makes perfect sense, considering that you'll have cash flow.

@Ned j.   This home is a home I plan to sell next year. I suppose that I should had been more concise in my original post. The thesis of my post was to ask for techniques or strategies to try to get my money back before the sell. I know that emotions should be inexistent, and my practices are not influenced by emotion. 1k of a loss is not a big deal, but my frustration was getting a little to me.

@Sharon Rosendahl   Yeah, I agree. I'm just going to keep along until sale time. Unfortunately, I do not think that they are or will be in position to buy anytime soon. I fear that by telling them now, they'll stop paying full rent or stop paying the extra, and at that point I will evict them. I have given them formal notice that they will be out if they do not make full rent. I just have my eyes set on making a smooth sale. I have about 90k of tax free profit there to make, so a loss of $1000 isn't much. More than anything, I'm just frustrated. However, I have tightened up my policies and feel I have already learned from this

@Alvaro Soto       I see what your point is and appreciate your insight. However, I am planning to sell it in March. If I evict, I think I may end up losing more, and the house may be vacant since I'd have to rent it for a very short time. 

@Michael Veloso I agree with you. I will keep them. I was mainly seeking input on strategies I may use to recoup as much as possible. 

@Andre Bollinger We never had a formal agreement documented. I do not know if that makes a difference or not. However, I don't think I'll be looking to evict, as they have been making full rent and $100 extra for the last 3 months and take good care of the house. Moreover, I will be looking to sale as we have only been renting it for 1.5 years and lived in it 2 years ago for 4 years, therefore, we will make all profit without being taxed and have about 100k in equity in it. Matter of fact, I'm looking to sale all my single family homes and buy a lot and build, since a friend if mine can build me a 4bd 2 bath home 2,000 sq ft with potential to later finish a bonus room for 100k. The build will be about a 150k investment on 5 acres 1 mile away from a good town and will have a value of 350-400k. I plan to use that equity and the additional 175k in liquid or so that I'll have left to buy multi-family or maybe even subdivide the 5 acre lot and build another one, as I'll be able to rent that new home for $1,800 a month, and will make back my investment in a little more than 6 years. After that, it's all profit and if I sell, I'll make good profit as well.

@Larry P. Im in Washington State