All Forum Posts by: William Coet

@Eric Veronica Thanks Eric, Is it common for banks to do a fixed rate Home Equity Loan for owner occupied duplexes?

Originally posted by @Eric Veronica:

@William Coet 90% LTV on an investment property at 5.24% is insanely competitive. I would highly recommend double checking just to make sure that is the rate for investment.

If that rate is accurate, I would jump on it. 

That is their owner occupied rate, and this would be an owner occupied property.  What are the current investment property rates?

Thanks!

   My credit union told me they offer a "home equity loan" (fixed rate) and a "home equity line of credit"(variable rate).  However, they only offer a 20 year term.  
I would like to find a home equity loan with fixed rate and no balloon that has a 30 year term.  This is what I'm inquiring about.
Thanks!

Hello,

Do banks do 30 year home equity loans?  If so, is it rare or common?  And if so, is it more common for local or national banks to offer a 30 year term?

Thanks!

@Melvin List Thanks for the reply!  The Credit Union I spoke with offers a Home Equity Loan (fixed rate) and a Home Equity Line of Credit (Adjustable Rate).  I am considering the fixed rate product.

@Joshua Stewart  Thanks for such an informative cost breakdown for the cost to build this small structure.  Throughout the process, What ideas have you learned for how costs be reduced on this?

Thanks

I just discovered that our local credit union does home equity loans, and am considering the benefits of paying cash and then doing a refi with them.  Although the rate is higher than a conventional mortgage, it requires less up front cost than getting a conventional mortgage with 20% down payment, appraisal fees and loan origination fees.

Some Details: They will do up to 90% LTV for 20 years at 5.24% with a curbside appraisal only and no closing costs to borrower.

Please don't hesitate to correct me if I'm wrong, but after a cash purchase and refi you will have more cash on hand than if a conventional mortgage were used, and this is good for continuing to purchase more properties.

Other than a higher interest rate, What are the drawbacks to this technique?

Thanks

As the title states, do they give priority to cash offers or offers using one of their mortgage products?

Thank you!

@Brenda B. I wonder if Fannie Mae prefers if buyers finance because they can carry the mortgage or benefit somehow from the buyer getting a mortgage?

Originally posted by@Barry Ruby:

Before spending any substantial amount of time or money on this or any deal, I'd run a preliminary analysis to see how the project performs. You can establish your unit count by using the units per acre permitted by the current zoning times the number of site acreage to determine the total units allowed by right. You can apply the unit mix (% of Studios, 1, 2 and 3 BD) and square footage of existing product and prevailing rents in the immediate market area for this first pass analysis.

Doing this drill should also inform you as to the structure the price, terms and conditions of the purchase agreement which should be your very next step before commissioning (and paying for) a feasibility or any other study, which makes little or not sense to conduct on any site that you don't have under meaningful control. The purchase contract should be structured to close at a point and time that you have all of your entitlements (shovel ready) and your debt and equity committed.

The highest and best use can be defined by doing the initial analysis and by continually refining your view of the Project as unknowns become known and more and or better information is learned during the pre-development due diligence process.

Drop me a PM to let me know if you need some help with doing the initial analysis.

Good post Barry.  Can you elaborate on how to analyze the demand in a market as part of the early analysis phase (before any analysis is payed for)?