All Forum Posts by: Mark Lynch

What equity position in a home would a bank need for me to cash out refi at 80% LTV?

I have a home that will be worth at minimum 150k with 67k mortgage on it. I’m planning on a cash out refi to get my money back out of the deal and to build out a second unit in the downstairs ( it’s already zoned for multi family)

Just curious on the LTV percentage I'd be able to get with equity position I have.

Thanks in advance!

I know it would be hard to give me a solid number. But, can anyone on here give a round about amount you could expect to add on to homes appraised value if you add a complete second unit to a home. Let’s say a 2 bed 1 bath loft style unit.

I have home I have access too that is off market. It has a 2 bed 1 bath upstairs unit that is in great shape just needs cosmetic updates. Below it is a 2 bay garage with a separate office and bathroom. The downstairs already has its own separate electric service and meter. My idea was to make a second unit in the downstairs. I could get this place for substantially lower then appraised value. Older owner looking to unload.

I know every area you is going to have dinner deferent home values. But, is there some type of formula I could use to get close. Say, adding a second unit would add 30k, 50k to the homes value??

Any help would be appreciated!

If I we’re to attain a 203k loan for my personal residence. Buy something distressed, use the loan money to purchase and rehab.

Could I refinance on that loan after 6 months to a year and pulls out the equity after getting it re appraised. So, I can then use that money to re invest in another property?

I know many investors use that strategy. I just didn’t know if there’s rules when using a 203k that prohibits doing this.

Thanks in advance!

@Michael Ealy thanks! I’m definitely going to explore all my options. I’m going to make this deal happen one way or another!

@Nate Marshall thanks for your response. I appreciate it!

@Don Konipol thanks for detailed response. I really appreciate it! I’m going to explore all options for securing this property.

The place is a win, win, win for me. Getting it for half what it’s worth ( built in 60k in equity), instant rental unit move in ready and has an attached office space and 2 bay garage, I can run my business out of.

I’m even weighing out a hard money lender for the entire purchase price.

Thanks again

@Stephen Akindona Thanks for the feedback. So, what if I was too borrow from the friend deposit it into my account and hold onto it for a few months then just say it was a gift when asked by another bank lender. Could that work?

The whole point is I came across a property that I can get for half of what it’s worth from a friends grandmother. She’s older and just looking to be done with it with as little hoopla as possible. She owns it outright. So, I will have about 70k built in equity right off the bat. My plan was to borrow the 15k from a friend, get the property rent it out and refinance in 6 months, pay him back, and still have money to play with for my next deal.

I was talking to mortgage company loan officer and I mentioned that I would be getting a private money loan from a friend for an investment property I’m looking to buy. She said that the bank will generally frown upon that and question about where the money came from. My question is, I know that investors use private money all the time. So, do you guys run into issues trying to financing using other peoples money. Or does private money usually just go to buying a property outright.

My income is sufficient for the loan I want to get and my credit is fine. It just seems to be the issue of the down payment money I’d be using.

What can I do differently??

Thanks in advance

@William Thresh lets hope so! Thanks!

@Jaysen Medhurst I’m definitely going to talk to the bank about it. Thanks for the advice