All Forum Posts by: Sam Mathew

Hello Bigger Pockets Members,

I am seeking advice if anyone knows how I might be able to get a line of credit on a market value $500k home that is in Michigan, but I live out of state in Florida.  Only seeking a line of credit, not a fixed loan. 

I called a few banks and credit unions but they said due to me being out of state, they wouldn't be able to do it.  Trying to see if there are still options with assumption of all good financials and credit score.

Please provide any guidance if you have any.  Thank you.

I'm typically a traditional (aka old-fashioned) 'Buy and Hold' or 'Flip' investor.  It has worked well.  BRRRR method, buy in cash and then cash out with Conventional or Private loan.

Would like to get BP member thoughts on this one. 

Home Details:
Single Family Home 3,800 sq feet.  5 bed/3 bath on 5.2 acres of land. 10 mins from a busy urban downtown with Big 10 university.

Options:
1) Rehab and Flip for approx $300-400k in profit (traditional route)
2) Buy and Hold (after cash out refi, maybe $600/mth in profit w/$350k or more cash out)
3) House Hack (it is easily possibly to add 2 more rooms w/o issue but have never house hacked before; profit unsure but each room maybe $600)
4) There is enough land to add tiny houses on the land but need plumbing/electrical (don't know much about this)

Would love to hear your thoughts?  I will include a picture of the land and property to get a better idea.

Wow, it has been 7 months now, and once I close on this house, I will probably start a new thread just talk about the rehab updates and plans for the house.  I plan to close finally in another 2 weeks after 7 months of waiting on this one.  The good thing is the bank again agreed to lower our final price to $290k for the home needing $150-200k of repair work and will likely (last year would have sold for $850-950k) take a hit when I sell but plenty of buffer room. 

I thank everyone for their input and guidance on this.  So glad I'm finally moving forward with it all.

Quote from @Leo R.:

@Sam Mathew you mentioned you think it will take approx. 4-6 months to complete about $150k-200k worth of work...how sure are you about that? Do you have a long history with your contractor doing 200k-level rehabs, and has that contractor always delivered on-time?  ...what will this 200k rehab entail?   ...often, foreclosure sales are sight-unseen--have you and your contractor been able to inspect the inside of the property to confirm what work needs to be done?

As others have mentioned, 4-6 months to complete a 200k rehab sounds optimistic (perhaps too optimistic).  My most recent rehab was only about $60k, and it took about 9-10 months for the contractor to complete everything... If you ARE able to do a 200k rehab in 4-6 months, please let us know the name of your contractor!  ;)

Good luck out there!

Thanks, yes this is what I am concerned about with the work also.  Cannot believe that I'm still trying to close on this house (due to some city items that will be resolved soon), but thankfully, the bank agreed to lower their price down to $300k from $450k.  Well worth the wait for that alone.  

Thank you all for the guidance and feedback.  Quite a bit to take in and research on this topic.  I didn't mention also, but being a single dad, I should look into some type (i.e. Estate Trust) that will allow me to minimum any government taxes for my child in the future, in case anything happens to me before I one day liquidate my rentals (which I don't really plan on).  So that adds an interesting layer...not just 1) Protection but 2) Minimize taxes for my family in the future.

Hello Bigger Pocket Members, 

I request your advice from experienced folks. I live in Florida but I have 12  rentals up in Michigan. They are all currently in my personal name.

I was considering putting even a $2M umbrella policy to provide personal protection. Or I was going to put them into an estate trust or LLC. But should the trust be a Michigan trust or Florida trust? Please let me know your thoughts.

Good Luck.  Sounds exciting but be careful in general with real estate in the current market conditions.  Right now is a question mark if prices will go down or ???  Stocks go up and down daily but real estate, read the trends. I am an acitive investor and agent in Michigan, broker in Florida but mainly invest up north for good cash flow and do flips in Florida for great profit.  It works well for me and everyone will figure out the model that works best for them.  But again, good luck with it and yeah, I started with a very little down payment, but 5 years later, thankfully, are usually offering full-cash offers using BRRRR. Not promoting it, just something that worked for me.

Costco shut down their mortgage lending services earlier this year without warning.  It was conventional lenders providing their best rates but Costo capped their lender fees at $250 per loan, which was incredible.  Similar to Lending Tree but better, guaraneed low $250 lender fee and rates were all lowest for conventional loans.  They had plenty of lenders compeiting also.  I used their services many times but they shut it down now.  Just curious, if anyone knows any information on why they did.

@Nathan G. Well definitely some unusual factors involved. Im paying cash and bank assumed quick closing. But the city said no closing until they finish up their inspection and approve closing. It’s been 4 months now and bank is tired out and can’t charge me extra since not my fault. So either I pull out but they will deal with it all from scratch again with the next buyer. Im actually pretty happy about it now. Let’s see where this goes.

@Sam Mathew

So I wanted to follow up on this house purchase. It has been now 4 months and haven’t closed on it yet since the city septic inspection hasn’t finished yet.

I was going to pull out of the deal altogether but the bank said they were willing to work with me and now has lowest the purchase price to $300k. That is awesome even considering market conditions, I have a $125k reduction from my original purchase price. Plus this was a bank auction and plenty of other bidders offered far more at $400k but due to issues (city inspections and delays) outside of mine and banks control they are willing to work with me. Now, even more excited about this deal.