All Forum Posts by: Chris Ellis

There are resources that will take a 2nd position on the property. It might also look better mathematically to do a traditional cash out refi and and pay off current 1st position lien holder and take the cash for what you need. I'll be happy to help. 

Using lines of credit is a great way to get started. It also is a great resource for covering rehab costs. You are pushing in the right direction. 

Form a LLC that you are both members on. Purchase the property under the LLC. Now it is in both your names so to speak. You can't really get clearer than that.

The only way they can make him potentially liable is by having him sign off on the loan. Since you are looking at investment properties and not personal, you are working in a more conventional environment. Meaning there is a little more flexibility from a traditional bank. Bringing a little more to the table as a down payment might be the only solution you need. 

I have a general contractor in Chicago that is just finishing up another duplex. I'll reach out if you would like to connect and see if he can help. 

Well your down payment would be what you use to buy the property initially. But yes in theory, you are accurate in doing a cash out refi. Will have to own the house for 6 months though first and have a tenant in place if you really want to make it happen. 

Add him as a member to the LLC. Complete the project. Split the profits. Then remove him would be the easiest way I believe.

For a first time investment property you are looking at realistically 20% to 25% that you will have to bring as a down payment. If you are making improvements to the property, the rehab costs and be included in the loan and it will be structured as an interest only bridge for a year or 2. Once you have been in the property for 6 months, done the renovations, and have a tenant in place, it is time to do a refinance and structure it into longer terms. 

To get down to a 10% down payment you are going to have to bring prior HUD statements and experience to the table. Usually 3 flips in the last couple years. I'll be happy to bring you to the right source if you'd like to connect.

It sounds like you already have a proven model. Expansion is a great thing. I say go for it!

Is a few months more than 6? Refinancing to better terms is certainly ideal. This alleviates some of the potential risk you face with the tenants not paying on time.