All Forum Posts by: Rich O'Neill

@Christian BeyerAnother option might be the Fannie Mae Homestyle loan. I am using it on my property now. That is a single so I am not sure if the numbers are the same on a Duplex or even if they can do it but it is worth looking into. It writes up just like a standard mortgage but they write the note on the whole project cost. They need 15% down for investors and a lot less as a owner occupant, if you still want to go that route. Here is the link to their underwriting guide: https://www.fanniemae.com/content/fact_sheet/homestyle-renovation-product-matrix.pdf

Other option is to purchase with conventional financing and use the HELOC for reno funds.

All the Hard Money guys I have talked to will only lend up to 65% of the ARV, which leaves you about $20k short. I think hard money should be a last resort and usually works better on lower priced homes.

Hi Ryan Moore In my opinion, it is not worth blowing up the deal over $350, unless you want to get out of the deal. I think technically if the seller and the tenant voided the lease then it is the property of the seller. You may be able to argue the property is less valuable now that the unit is vacant which might be a good bargaining point. Good luck!

@Christian BeyerThanks for the invite! What time is it? I have a meeting in North Jersey around mid day so I will have to see how long that goes and when I get back. WC is definitely pricey so I am looking mostly in Delaware county by the airport. I have seen a bunch of deals that make sense but I didn't have the cash available. The prop I currently have under agreement is going to be all in at about $50k and cash flow about $300 a month. I think I can scale faster with the cheaper properties like this than with the more expensive ones like WC. For a primary though, you can't beat WC. I grew up here and love it. 

Aaron, does the purchase financing lender on the new property consider funds from a HELOC equivalent to cash? What is your interest rate on the HELOC? Is it amortized like a standard mortgage or is it interest only? Do they have any closing costs associated with setup? Sorry for the ton of questions. Really curious about the pros and cons of HELOC vs refi as I will definitely be doing one or the other soon.

Hey Christian, Where in West Chester? I live just south of town. Have not tried using a HELOC but I have heard from a few lenders that down payments have to be verified personal assets, not leveraged. Hopefully one of our lender colleagues on here can give you a more definitive answer but I know some might give you a hard time about it. Maybe a cash out refi on the other property could give you free cash that looks a little better to the lender? Closing costs are a bear with that but it might make the lender on the new prop more willing and it might result in a lower combined interest rate. Is 20% down your choice or is your lender asking for that? If it will be your primary you should be able to put significantly less down, I think I have heard as low as 5-10%. Good luck with the acquisition!

Thanks for the help guys! @Eric Armstrong I will definitely reach out to Jason.

Hello BP!

Been kind of lurking the site for about 6 months now and loving everything. Listened to the first 22 or so podcasts so far and they are awesome to listen to in the car. I am in the West Chester area and own my first property in Kennett Square now. I am working on getting my second property now in Delaware county. We have a verbal AOS with the seller but they need final approval from the bankruptcy court. Anyone ever dealt with that? 

I really enjoy networking and Bigger Pockets is clearly a great place to do that. Would love to connect with anyone in the area! I have a great realtor in@Ray Peslarthat I found here on BP and a great lender that I found through Ray. Both have been awesome to work with. Also have a contractor that is a good friend of my family's. Anyone know of a good real estate minded accountant? 

Looking forward to networking more with everyone.