All Forum Posts by: Cameron Wells

Dont build on the 14 acre parcel . Have your father  carve out a part of the property as a single  lot to build on .  Check with local zoning rules etc .

I agree with what Mitch mentions about HELOCs as well. Usually, you want to be able to pay HELOCs back quickly. This will be a long term loan so a construction loan hard money style that is interest only would be preferable. Then you could refi if rates drop and keep good long term debt and keep your DTI manageable for future investments

A cash out refinance on the Charlotte property would probably be the way I would lean if I were you if you have enough equity. You’d get a better rate, and have stable long term debt

Hit me up if you need anymore help!

@Cameron Wells. I'm local here in Asheville, and eager to help you connect to other people and resources if you want to have a call.

Personally, I would only use HELOC money if the project will be rather quick. I've used such for projects that ran long in the past, while interest rates rose again and again. It sucked. But on the other hand, once the money was paid back I wasn't paying interest on it and I could redraw (unlike a traditional mortgage). And even if the rate is prime plus a percent or two, it's still superior to private or hard money. That said, there are very few options for HELOC's on investment properties. Signature FCU is the best I've heard of. They'll go up to 80% LTV depending on your income. I believe they have a $200,000 line limit though. I'd recommend taking the slightly higher rate for the setup that's interest-only for the first 10 years, as it'll help keep your DTI low for future mortgages.

If you need some local private money connections, I can intro you to some options from our BP meetup network. If you do a construction loan, I would recommend Jason Chambers at United Federal Credit Union (I can send contact info) and Patrick Blackburn at Movement Bank (I can send you info). And if you end up building and then refinancing into a conventional or DSCR mortgage, I can help there as well.

construction loans are very convenient to use that are hard money style . is it going to be a stick built just smaller in size or an actual cabin ? 

Hi Cameron, based off what you’ve explained I believe you could go several routes but a heloc would be great considering you have the equity in a rental already. Depending on your time period for construction, a heloc could be a great option as it provides flexibility and then you can always reuse later down the road. If you were to do a cash out refinance after the property is completed and take out that equity, you could pay off the heloc and lock in a lower long term rate on the home.