All Forum Posts by: Mack Lev

@Darrin Carey do you mind if I email you as well?

@Paul Amegatcher do you mind if I email you so we could go over specifics?

thanks in advance for the replies to everyone at BP. 

So recently I've brought 2 duplexes in Dayton OH as a newbie investor (22yrs old, w/ decent salary).

It's funny because when I see forums specifically talking about Dayton I always start regret it but there's always a silver lining and I need advice on how to weigh those options.

To simplify it:

Duplex 1

$24000 ; 

$4500 down; 

5% interest over 5 yrs

$5-6k complete rental rehab

Duplex #2

$32000

Bought outright from financed HELOC on primary home > 15yr loan

Major curb appeal

Very minimal rehab required 

I make about $30k living with my mother handling this out of state investing as rookie, and as expected it is hard but I'm keeping my head high and pushing. 

My strategy was to fix up all units to make them rental ready, try to make back the profits from renting, and then eventually sell to  purchase something more closer.

Since Dayton OH market is depressed would you guys suggest even putting the money in for a rehab and possibly flip with tenants or just selling ASAP without rehab or realtor help, get back what I can and get out of Ohio. Because I've seen some of the BP old heads really bash Ohio REI and I just want some educated advice.

So rehab/flip? Rehab/rent? Or sell ASAP no rehab and invest in my area (Houston TX)?

Please share your thoughts. Thanks 

Mack

Originally posted by @Jassem A.:

I'd lean towards equity loan instead of line if the rate is better unless your primary plan is to flip. I'd look at NFCU, USAA, and LFCU as well. You could also inquire with each bank's commercial lending dept. Easier to qualify for HELOC if it's on a primary but I have one HELOC on a rental and 2 commercial loans on rentals.

 I've thought about using a equity loan, but withdrawing all that money is a turn off to me. Not to say that I wouldnt use good judgement on investing it, but I rather just pay on the money that I use (heloc) rather than withdrawing the whole equity..

And I think my exit strategy for the time being is buy and hold rather than flipping; since im young that tends to make sense. But it could change given the circumstances. Thanks for the suggestions though. Ill check out those credit unions.

Let me give you some background info. Im 22 years old, making about $30k a year. I own a cheap rental property free and clear (worth about $55k) pulling in about $700 monthly. I 'm also on the deed to the home that I reside in, thanks to my mother who did this so I could apply for a HELOC because her credit is shot. (And yes lenders will still lend me the money even if I'm not on the mortgage, I checked.. surprising right?)

I know real estate investing is what I want to, and my plan was to use a HELOC from either my primary residence or my rental to go out and obtain another property. I just applied for a HELOC through PenFed credit Union for my primary residence ($60k in equity at 80% LTV) but its looking like I might get denied due to a number of things (length of credit history, multiple inquires, etc. etc.), also my credit score is 710.

Do any of you guys have any suggestions as to what are my best chances obtain a HELOC. Because it seems like its going to be the same end result everywhere and I dont want my credit pulled that many times just be denied. Any advice BP?

Mack

Originally posted by @Matt M.:

Are you employed? I assume you are. They should look at that along with your score. If they won't do it, find another CU or bank that will.

 Yeah. 4 years at UPS. Pretty good. But my question was the repercussions or drawbacks of getting denied

Alright, so I have a rental property owned free and clear, and I want to use a HELOC (preferrably from a credit union [PenFed to be exact]) in that property to go out and fund other RE deals. The problem working against me is that Im only 21, so my credit history is barely short of 4 years.

I have a good track record and everything. Payments on time, credit utilization rate at 31% (could be better), nothing has gone to a debt collection agency, etc.. I know the history of my credit is a huge factor working against me in getting approved so i wanted to know what were the cons of being denied.

I know I would probably have to wait 2-4 months before asking again, but are there any other negative implications that come with being denied. Because getting denied and having to wait to ask again is horrible enough as it is, but if it comes with anything else then .... wow.

Also, does getting denied show up on your credit report? I guess thats one of the things I need to find out along with anything else.

And I know that another solution would be to have somebody that trusts me and is more establish to cosign the HELOC with me, but thats kinda major to ask of someone. Even with a good relationship. And if i were to have someone more qualified than me to cosign it could they be removed giving them peace of mind?

Thanks in advance BP community

-Mack

@Brent Coombs , thanks! And the rental property is technically my mothers, but im on the deed (this was done to give me an assets to start my investing career). The reason why I said $15k is that all decisions have to go through the approval of my mom regarding the HELOC and how much I draw out. She knows I'm pretty well versed in real estate investing (generally and for my age) so she trusts and hears me out on most of my investment strategies. But bottom line, shes not interested in me withdrawing all the equity from the home incase something were to "go wrong". But worse case scenario is that i return all the money I withdrew and just pay the monthly payments and any other fees that came with it.

But your saying using $40k down towards a property worth about $250k would be a good move for me? Assuming that the terms were good?

Also my credit history is poor (3yrs) , so after I overcome the obstacle of actually getting the HELOC, i would like to avoid major banks and try to do a owner financing scenario to avoid being turned down.

thank you guys for your input

Okay so I own a cheap rental property free and clear and I was planning on using the equity to invest in other RE deals. I'm in the process of raising my credit score to apply for the HELOC but I'm estimating I might receive $40k from it. My original plan was to use that money to go to a tax deed auction to acquire a piece of property, but in Texas the redemption period is 6 months. So using about maybe $15k (my comfort spending limit) from my HELOC, being charged 6 months of interest on that and only getting a (25%) return on the face value of the delinquent taxes (if the owner was to come forth and claim it) is obviously not worth my time. In that situation I would be losing money. Obviously I formulated this plan before I accountant for the redemption period after the purchase of the deed. But moving on to my question, without a lot of cash on hand and only about $40k in equity to invest, what's the best way to go about this for a flip? Using the HELOC as a down payment for a greater loan to increase my purchasing power? (This would result in me being a cash buyer and maybe to negotiate a seller down a notch to equal a bigger flip for me) Using the HELOC as a down payment towards a rental and try to break even? I mean Iam really clueless here on where to start and I would love you guys input. Also, I am only 21, with good credit, and a good job. If that helps. Thanks in advance! -Mack