All Forum Posts by: Nick Causa

I could sell it yes and there would be a lot more than $150 left over. Closer to 600k.  But then we’d need a place to live and were getting something over priced with a larger than 3.5% rate. 

I'll try to make this short: my wife and I own a duplex that we did a live in BRRR (got the refi at 3.5%) and had owned an airbnb that we operated for 6 years but sold because the town decided to do away with them (very nice of them). So we've been doing this RE thing for some time but I still consider myself a newb.

My question is: we have an unused HELOC for 150k but the rate is 10% (harsh). I'd love to get back into a project but i have to say the market is rough right now as i'm sure you all agree. My thoughts were to find something to buy for cash and flip it so we dont have to deal with banks and REFI'ing into a horrendous rate. The problem is finding something under $150k to then use the extra funds for a reno is quite rare.

Also, we’re certainly outgrowing our duplex unit as we’re a growing family so finding something larger to move into wouldnt be too bad. Was thinking rent out our unit, do another another live in flip, live there for 2 years to avoid the tax hit, then sell it….

Anyone have any creative suggestions? Or should we just sit and save and not use the HELOC for a project? Not the worst alternative.

Thanks in advance

Probably a silly question and the answer is right under my nose but: how does it work when you purchase a “tear down”. If I’m putting 200k (30% down) in on a tear down because it is in a great location, and i knock it down, how does the financing work to build a new construction there? How does the 200k get rolled into the building costs? Or does it not? I’m familiar with the BRRRR strategy as I’ve done one before but this seems very different. I assume you buy it, knock it down, get a renovation loan, build the house, and then when its done you contact the bank to put a mortage on the new build and reimburse yourself? Is the 200k just looked at as the lands purchase?

@Amber Forkey this is perfect thanks so much

Hi i’m looking into out of state markets and wanted to ask: does anyone have any suggestions where I could find data like population growth, commerce etc? I feel like a while ago something was mentioned on a podcast but i cant remember the resource.

@Eliott Elias do you have any 1031 company recommendations?

@Dave Foster thanks Dave. Another question. Are you able to do the 1031 and go from a single family to a commercial loan apartment building property?

@Jay Thomas thanks Jay. Yes i connected with my bank about this as well since i have a lot of equity in the properties but the rates are quite high as you could imagine and take my 3.5% on the 575k and bring it to 5.75% at a 693k loan. Lots of interest to pay in that term and who knows if the rates ever come down in that time?

@Dave Skow i can do that thanks. I think the smart thing to do is take the Home equity loan and pay off the HELOC. The loan im getting quoted is 7% with an $1130 payment that goes towards P&I. 7% P&I is brutal but its better than 9.3% Interst only! Refinancing a 575k loan from 3.5% to a new loan of 693k at 5.75% seems almost worse than borrowing from my 401k (which i wont do). The math on the interest for that new loan is $278,880 after 7 years as opposed to what 7 years on my current loan looks like ($140,868). Looking at it this way feels like a no brainer even if the other option satisfies that Interest only HELOC fully.

@Mitch Davidson thanks Mitch. No no PMI. We bought the house with an FHA 3.5% down payment but refied right when we completed the reno and got tenants. We had a lot of equity so we opened an interest only HELOC (lower monthly payments) to recoup reno costs. As for the equity loan, its something im considering so i can crush the HELOC but its 7% along with a monthly payment of $1130 which is much higher than the interest only (the benefit is that it is principle and interest though). Is it better to have low monthly payments to keep expenses low or less interest tied to larger monthly payments?