All Forum Posts by: Nick Vought

What do you mean by time of closing? closing on the deal? sorry if this is a silly question.

So I can cash out up to 85% of as is value if I am still living there, no matter how much equity I have built up into the property? if so how long do I have to stay at the property if I do so?

I am trying to get some strategy ideas for my second property, I thought I had a solid plan but it seems now its not so full proof..

I bought my first property a four-plex in March, and I am trying to figure out my next step and how to get ready for it when that oppurtunity comes. I got an FHA loan on the property which was 450k and put down 3.5% on it. It is in good condition but needs some cosmetic work. I am currently getting 875 per unit, all 2 bedroom 1 bath. I have updated the unit I am living in and will update the rest of the units along with some exterior stuff this year. I think after the updates I can get between 1k-1.1k in rent for each unit. After I have lived at the property for a year, I was planing on moving to an apartment and using the BRRRR method and refinancing my property after the rehab is done and using that to put down on my next property. From speaking to others and doing some research it seems that it will be harder to refinance than I thought with it being an FHA loan.

Can anyone give me some advice on what they think my next step should be and or what options I might have? My goal is to buy and hold my properties like I am with this one.

Any feedback is appreciated!

@James Lanier I am in the same situation, and trying to do the same thing. I don't think Andrew understands the question. From my understanding (don't quote me on this) if you have owned the property for more then 6 months and or have built up 20% in equity you can convert it into a conventional loan. From what I've been reading people are saying turning the loan into an investment property loan once you have 75% LTV and then pulling from that is the way to go. I have not heard all the options yet and am also looking for best strategies for my 2nd buy and hold property.

@Dre Scott Yeah that probably won't happen, at least not soon enough.. So for my next property, which I am going to try and purchase early next year, I should look for a private money lender to help me come up with the down payment?

I believe with the renovations and the rental income possibility after its all said and down I could put it on the market for 550 and get offers, but I am not sure it will be appraised that high since there are not a lot of comps in the area.

The only reason I want to refi is to use that money top purchase a second property, I don't want to you it as in income, but as a down payment for a second multi family home like a duplex. It was my understanding the the BRRR strategy was to do so. If I am looking to pull lets say 40k in refi money to purchase a 200k duplex, is that possible and would I need to owner occupy it?

@Jacob Murphy

Thanks for answering this Jacob, I really appreciate the input. So I guess my questions to counter that would be. 

Should I update the rest of the units like the one I am living in, or should I save that money and put it towards my principal to get closer to that 75% LTV?

How much of increase in rent do you think I would need to convince the banks? 

What exactly do they go off of to calculate the value, is it strictly off of an appraiser? 

If I were to qualify for a investment property loan at 75% on my current place to get out of my FHA, would my mortgage payments go down? and would I be able to apply any of that to a down payment on my next purchase?

Hey everyone,

I bought my first property a four-plex in March, and I am trying to figure out the best strategy for my next step and how to get ready for it when that oppurtunity comes. I got an FHA loan for the property which was 450k and put down 3.5% on it. It is in good condition but needs some cosmetic work. I am currently getting 875 per unit, all 2 bedroom 1 bath. I have updated the unit I am living in and believe I can get between 1000-1100 in rent for it, going off of similar 2 bed 1 bath units in the area. I would like to use the BRRRR strategy and use the refinance money to purchase my next property after I have lived there for a year. After I have lived at the property for a year, I plan on just moving to an apartment and not doing another FHA loan for at least the near future.

So my questions are:

1. Do I have to convert my FHA loan to a conventional loan in order to use the refinance money on my current property to purchase my second?

2. Does the refinance go off of just the appraisal value of the four-plex or does it also go off of the amount I am getting in rent?

3. With the rehab just being cosmetic like I said, how much should the min/max I should spend updating units? FYI I spent about 6k updating the unit I am in, but basically did everything myself. New floors, molding, LED recessed lighting throughout house, new paint, new kitchen countertops/sink, bathroom/laundry room floor tiled, shower wall tile, new vanity, new doors. 

4. Last question, would it be a better strategy to convert my FHA to a conventional loan instead of using the refi money on a second property. I crunched the numbers and I believe my mortgage payment would go down about give or take 1k a month.

Any information would be greatly appreciated, thank you!