All Forum Posts by: Tom Kaz

So I’m in the process of closing on our 3rd multi family property. The most recent one is in a suburb just outside Chicago’s borders. I’m under contract to purchase the 4unit building for 253k. Comps sold in the area range from 285-315k so there is some equity to be had! 2 out of the 4 units are decently upgraded. And cashflow after all expenses can be around 1k.

We had the inspection today and for the most part it was pretty good until we hit the crawl space. Inspector noticed mud trails, rotted out 2x4 sills and water leaks here and there. No vapor barrier so moisture is present 100%. There are about 3-4 spots where the subfloor is rotted out and you can push your finger thru the boards. I was all In for closing until we hit that crawlspace and my eyes were opened by the underlying problems.

Seller stated that termites and pest control was completed on 2015 and that the “termites” where taken care of. He has also agreed to credits and fixing subfloors and what not.

Would you proceed forward in this situation or should I back out? I get the inspection report tmrw but I was down in the crawl when it was being completed and he didn’t sound to happy about the findings.

Any advice?

@Christy Holt start eviction process ASAP and serve them a 5 day notice to quit.

@Tushar Shah did you ever purchase in blue island? Any input from your experience dealing there?

@Aja Devaney yes are there any areas in that neighborhood to steer away from?

@Aja Devaney

Are there any areas to stay away from in Maywood? I too have been curious about this area.

@Eric Carr

What is your take on buying into bitcoin today? Isn’t the halving suppose to occur this month?

Jason, did you end up going thru with your first investment? Anything you can add to your findings? 

Correct, mine would not either due to freddie/fannie guidelines. 

I may just opt out of doing the cash out on my primary just to keep the line open. I will be getting 25k from my cashout refi on my investment property so im half way there with the new line of credit they offered with much weaker terms. I will just need to tackle that balance until i can have enough for my next down payment.

Yes, im in the process right now and am contemplating if i close the line or leave it open.

Terms are much weaker as i would cut my draw period and repay period in half! Plus the rate will go up, maybe i will have to just pay down the line before my next deal....

I will see if the lender can subordinate the HELOC, but i doubt it...

Hey BP,

So let me give you the run down, I currently have a HELOC pulled on my primary mortgage for about 74k (total credit line of 80k) in which I used to purchase my second 4-plex 6 months ago. I close at the end of the month on my BRRRR cash-out-refi of the 4-plex which came out great. I'm basically getting all my money out of it to pay the HELOC off but ran into some issues with ratios because of my wife's student loans so a portion of the cash out needs to be allocated to pay off one of her loans which is fine by me!

I have a ton of equity in my primary home so my lender figured we could to a cash out on that as well to pay off the HELOC, her loans and I would be back to square one in regards to being able to have funds for another down-payment. Unfortunately, I had no clue the HELOC had to be closed with the cash out and then re-opened.

My current HELOC line is at 80k with a 10 year draw and 20-year repayment. If I were to close the line and "re-open" one, it would be a line for 40-45k with a 5yr draw and 10-year repayment. Basic Prime+1 rates (my current HELOC is actually at 3.6% because of the current rates!)

With that being said I wanted to push for options to try and keep my current line open but it seems there is no way around it due to the CLTV. So now if I want to keep my current HELOC open, I will need to just do the cash out refi on my investment BRRRR 4-plex and pay down her student loan for the ratios to work and at the end of this all I would be getting a check for 30k to apply towards my current HELOC which would bring the available credit to about 35k.

While this was all going on I had been searching for my next 4-plex deal which I have found but will be about 20-25k short either way I go with the cash outs (60k needed for a 25% down payment). My question to all the pros out there is what would you do if you were in my shoes? Have everything paid off with 2-cash out refis and re-open a line for 45k with the weaker terms? Or just do the cash out on my investment 4-plex and keep my larger HELOC line open while paying it down ASAP. I should be able to have purchasing power within the next 12 months as I will be throwing all the cash-flow from my two owned 4-plex buildings at the HELOC principle.

Thank you in advance BP, if any more information is needed let me know! So glad I joined this community of savvy investors!