All Forum Posts by: Michael Lonsdale
Michael Lonsdale has started 1 posts and replied 14 times.
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Thanks for the response @Marty Johnston
Two things I was hoping you could help me understand better
1. When you say 'unsecured debt for gap funding'... are you referring to a personal loan?
2. What do you mean by gap funding? Funding the entire purchase of the house in cash? Funding the renovations?
Thanks again for your insight and opinion
Post: HELOC impact on credit utilization ?
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
@Kristin Feerst I was wondering this exact thing today. Looking forward to following this thread.
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Good points here. I think this is what caused my HELOC to move so slowly. I wasn't working with a specialized lender. I was working with very traditional lenders who focus on single-family residential houses.
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Quote from @Dave Skow:
@Michael Lonsdale - thanks ...1) you dont mention the places you tried to get a HELOC ...but I would suggest continue this effort ......some lenders should have flexibility to approve a heloc based on your job and work history ( assuming you have 2 yrs history ??) ...when will you have 2 yrs on present job ? Try the bank you bank with ....try the lender that has your 1st mtg .....try the smaller credit unions and banks in your local area
2) a 90% heloc lender will give you about 70K ....an 85% cltv HELOC will give you approx 45K ...how much are you looking for ?
3) try using a combination of sources to raise the funds needed ...do not do a cash out refinance or sell your home ( unless you plan to sell the home anyways ) ......
Great thoughts here Dave!
I don't have two year history at the job, that actually has been one of the reasons the HELOC has fallen through.
I have tried a few different lenders all with LOW flexibility and they weren't able to make anything work. I realized recently that I need to be working with a broker who has more flexibility and options in the different products they offer. My bank, Ally, doesn't do HELOCS. I am now working with the company that originated my loan. Fingers crossed this gets done. I should have started with this broker sooner.
2) I'm looking to take out as much as possible. Most lenders can only do 75 or 80%. Again, I recently realized I need a broker, not a traditional lender. This was kind of stupid of me.
3) Agreed I shouldn't sell and rates jumping means a refi is off the table. I like the idea of combinations of funding. Hopefully, a HELOC works, @Sara Aviles also gave me some really good insight on other methods of funding.
I really appreciate your input! Very valuable perspective.
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Quote from @William Lokar:
@Michael Lonsdale My first investment was a home that we bought, renovated, and lived in for a year. It can be a great way to get started!!
Thanks for the insight!
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Quote from @Nicholas L.:
without cash, there is no BRRRR. BRRRR deals are tough to find, hard money loans are expensive, and contractors are booked up.
sounds like you have a great job and are well positioned for the future.
so - option E: wait, save.
tough to hear when it seems like everyone on BP is just buying.
I appreciate your Post Nicholas!
As I wait and save, I'd like to tap into my 100K+ equity in my house. I'm having trouble closing a HELOC but I'm still working on it.
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Quote from @Ryan Thomson:
What if you buy the next fixer upper with a 203(k) loan. You intend to move into the house and wrap the rehab costs into the construction loan? Turn your current primary into a rental. Great way to scale and only need 3-5% down.
Also if you are making 120k/year and don't have enough for a downpayment it's time to think about renting out rooms in your house or cutting down on expenses. I don't know your situation, but I would think you could save the downpayment pretty quickly.
Thanks! I have not heard of a 203(K) loan, but I will look into it.
As for saving money, my job is new and I absolutely will be doing this, my expenses are low. They should take a few months. But I'm trying to tap into the equity of my house in the meantime through a HELOC.
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
@William Lokar Yes, C really is an option. After reading your response and Leo's response it seems like buying a new primary residence would be the first thing to do. Thanks for your opinion and insight!
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Wonderful insight! Thanks, @Leo R. I appreciate your viewpoint!
Post: Trouble funding my first deal
- Investor
- Inland Empire/Palm Springs
- Posts 14
- Votes 7
Thank you @Bob S. I appreciate your input