All Forum Posts by: Grant Smith

@Rachel Randolph That is excellent even though some consider me young i only wish i had started this earlier and not wasted 4 or 5 years of my time renting when i could have been saving money and gaining equity on a home of my own. I unfortunately dont have the benefit of being a full time rei as i now have a full time job as an engineer. I have learned that unless you have private funds, it is quite difficult to get your 'feet wet' esp if you plan on getting any kind of financing threw a portfolio or conventional lender.

@Alex Allen im glad my post is inspiring, besides a little self glorification, i intended it to be an inspiration us younger investors who just dont really know what to do. You hear all the experts and guys that have done it ( who really know what they are talking about) tell us stuff and sometimes it all sounds to good to be true and hard to believe but once you do some exploring yourself you will see that almost anyone you encounter (other investors, agents, loan officers) they are all here to help you and love to start building relationship with young ambitious investors. So good luck and keep setting goals for yourself.

@Mark Bookhagen Thank you for the response, was exactly what i was looking for. Currently though i am paying PMI becuase it was an FHA 3.5% down so purchase price was 80.5k. PMI is like 70 bucks a month which i mean isnt killing me as im renting the other rooms out and actually living mortgage free.

But what you said makes sense and since im only gonna be using it for cost of rehab on my next project, paying only interest on what i use.. i think i will have to agree with you. and like @Jean Bolger said, i have an account with a local credit union who is infact offering a very similar deal on HELOC's...

Thanks again for the responses guys!

thanks @Patrick Jacques @Ramon Jenkins @Joshua Dorkin @Pete T. and @Elizabeth Colegrove ... the support one can recieve form this site is invaluable in keeping me motivated to continue to strive to reach future goals.

keeping a reserve is something that i will definitely have to remember as i have already seen first hand how easy it can be to forget something like that.

thanks for the support

Sorry i thought i described it all but ill just list it for easy reference.

FHA Loan

Jan 14'

Loan Amount: 79,000

City Assess: 179,000

Comparable Comps Average: 135,000

70-80% LTV

I know there is a seasoning for cash-out most of the time(have heard some local banks might not have a seasoning period) and im unsure for a HELOC.

Another benefit i could see with a refi is that i could get out of paying the PMI if my LTV was >75%. Hope this helps

@Robert Leonard Thank you for your advice. I have that on my to do this week to get in touch with a loan officer and would definitely want to look at refinancing to get ride of the PMI

So I have finally gotten around to talking a little about what I consider my first success into real estate investing.

Some background, Sept 13' I had just turned 23 and had been out of school for 9 months. Still reluctant on wanting to work a 9 to 5 minimum 40 hour a week salaried job and only working part time as a swim instructor I became really interested with real estate investing and immediately started fumbling threw books and online webinars and forums to gain as much knowledge as i could.

Like you always hear, the second you start broadcasting your goals and ambitions to people, a lot of the things you need are already their and waiting for you to take.

Fast forward to Dec. 13 and I had gotten a small team behind me ( loan officer(cousin), real estate agent(dad's friend), contractor) and i begun to scour the MLS looking for a home i could afford and figuring out the best way to do it.

With little money upfront, me and my team had decided the best route for me was an FHA 3.5% down and owner occupy for a year. I had found a HUD home that was rehabbed in 05 so major systems and roofing was only about 9 years old with a list price 100k cheaper than city assessment and 55k cheaper than average comps for the area. My bid was accepted and i was on my way to being a First time home owner. I did a little updating to the floors paint, ceiling and appliances and spent about 6k total including closing cost.

I now have two rooms rented out to coworkers and live for free as i continue to have my mortgage paid by my roomates. I will soon have plans to take equity out of the home and hope to jump start my investing business within the year.

Heres a few pictures of the udpates.

Hows it going BP?

I know there has been touched upon before but id like some advice for my specific situation.

My current primary residence has about 100k in equity in it based upon my loan amount vs city appraisal. Local comps are showing about 80k in equity if it were needed to be reappraised.

My goal.

Im going to partner with a friend who doesnt current have any loans to buy a house with intentions to flip. He covers down payment in financing.

Im going to be project manager/ pay for the cost of rehab.

My question.

What is the best way for me to use the equity i have in my primary residence to pay for the rehab. HELOC or Cash- out.. Or if there is any other options entirely.

I look forward to hearing some expert advice

@Jason Measures as a new investor, your story is really motivating because it shows that it doesn't take a seasoned investor to be able to think creatively and obtain such a deal. One subject which i kinda know about but dont really understand all the details, cash-out refinance.

You mentioned you have a 6 month loan with no payments till the end in which you will pay back in its entirety + interest. How long did you have to wait to cash out, what type of bank or institution did you use, and what % LTV were you able to get out of it.

Amazing job and thanks again. Hope to have a couple of these stories to share in the future as well!

@Ian Harris

I'm currently living in Hampton and I know before I started researching and gaining this knowledge of investing. I too was a renter and with a 3/2 1200 might be a little high. I was paying exactly 1050 for mine so you should have better luck. In my opinion I would do a little more research of comparables and see what other houses in the west hampton neighborhood are renting for

Thanks a lot @Harry M.

I cant wait to look back in 20 years and be able to say the same thing. Id love to hear stories of how you begin, though i know the area has changed quiet a bit since you were around.