All Forum Posts by: Account Closed

The cash isn't for another down payment, the cash is non-existent. Well, not entirely, I have about $20,000, which is quite a bit shy of 25%. I was going to borrow money to get the 25%, then pay it back after I got it from the refinance. But it sounds like that idea is a bust, so it's back to the drawing board.

I own a 4-unit currently, so I am aware of the expenses that you are both referring to. I really want to pick up a second investment, but I lack the down payment, and everything I have read ever suggests never paying down more than 10%. I lucked into my first property because I was able to owner occupy it with a VA loan $0 down. But now I am stationed in Hawaii and I can't afford a thing here. So I am trying to buy back near my first investment, but I obviously can't owner occupy it.

1- I definitely dropped the ball on this one, as like you said, I was going off of the value for tax purposes. I'll have to look into an appraisal I guess.

2- I spoke to a loan officer who said that a refi was possible as soon as the primary lender sold off the note. I don't know if he wasn't thinking about the fact that it is investment property. I guess I don't understand this part, I'm not well versed in mortgages and refinances. My lay-man logic is that if I owe $100,000 but the house is worth $150,000 I should be able to get that $50,000.

3- My cash flow assessment was based off of rent minus PITI, estimated yearly maintenance costs, management fees, etc..

I found a house I want to purchase for $140,000 with an assessed value of $180,000. For any bank financing, I am required to put down 25%, or $35,000. I am going to pay the 25% down and get a 30 year fixed mortgage of $105,000, then as soon as I am able to (2-6 months) I am going to refinance the loan for $150,000. I will get my $35,000 back so it will essentially be $0 down, I will have the house, still have some equity, and have extra cash in hand for any unexpected vacancy or to use as another down payment later on.

Am I overlooking anything? I realize with a refinance I may pay a bit more, but the numbers are all still good, I will have a $200/month cash flow from day 1.