All Forum Posts by: Wendy S.

@Chris Davidson

Thanks. Appraisal was done prior hence my presumptions. So if I buy today with X appraisal, I am thinking even if the Heloc lender orders another appraisal it shouldn't be too far off plus there is room for little upgrades with finishes.

I'm ok with doing the deal without the HELOC or HELOAN but it would be nice to know I can use up some of that equity to get back all or most of my initial money back.

@Suzie Remilien

Thank you, I'll double check if 90% Ltv is still being offered. Though it was quite recently with locals here.

I have seen other companies reaching out to me offering up to 100% on existing equity in other property but I haven't vetted them yet. "Figure" was pretty good too from their reviews but still researching.

@Suzie Remilien

Thanks for responding to my post, albeit in a general sense.

I am aware having equity to get a HELOC, based on my calculations my total loan would not exceed 90% of the value of the home. It would be an owner occupied loan hence a 90% Ltv vs 80 or 75 for an investment property.

Also aware of the total 45% DTI for conventional loan and perhaps a bit higher for FHA. I was asking given what I've shared is this viable or not or are there other factors I would need to consider.

Even just getting back initial investment could work as well, not necessary to get the additional $50,000.

Good Day everyone.

I would like to understand if my thinking to pull money back out after purchase is on point, flawed or get solution on how to do it.

PV $950,000

PP $805,000

DP $48,300 (6% $805,00) primary res

Loan $756,700

(Providing this is within the limits)

After purchase get a Heloc based on owner occupied 90% Ltv. So

90%*$950K-$756K=$99,000 Loan

Total Loan $855K ($756,700 + $99,000)

Is this doable, can be done immediately or require seasoning?

2nd option

PV $950,000

PP $805,000

DP $161,000 (20% avoids PMI)

Loan $644,000

Heloc

90%*$950K-$644,K = $211,000

Cash gained $50,000 ($211K-$161K)

Not sure about qualifying on the larger HELOC with higher repayment costs.

@Tom Degroodt

Thanks Tom. Very True. That's why I suggested putting $10K down, which is like going on a 2 week vacation. You have to spend the money somehow without always thinking of the 4th quadrant, even though that money was realized from another asset

You're in GA so you may relate even better to our market. Tbh, she does not like properties in that $190K price range and frankly neither do I anymore unless we can seriously value ad for at least $1,000 cash flow. More looking at equity position now.

I looked at a Quad for $550K she didn't like how the area looked so I passed. Then I looked at a 6 plex but it sold for $950K. So we're now waiting on a $1.2M triplex in Atlanta that's being prepared for market or a commercial 7 units building that the owner decided to upgrade with 2 leases expiring before selling. Discussion in the lower $600's.

I've managed to convince her to get into real estate. She has no interest in being a landlord, would be quite happy renting an apt and likes to buy cash. So believe me, there were days I used to knock my head against the drywall until I managed to find a balance. Partnerships are tricky and you can't always be the one making the decisions, partner has to win too. Else it's seen as your way or the highway. I may have another year to be influential and I'm trying to set a financial successful path that will create wealth, residual income, suport philanthropy ideas, community help and know when she goes off and have a family of her own, she will be ok.

The good thing is, she is now researching credit unions and banks for a car loan. So I would be grateful for some suggestions.

@Adam Martin

Thanks Adam. So she has been listening to me and leveraging for a while. She co-owns other cash flowing rental with me that she paid her 20% deposit on. We have been sharing a car since 2020 in different households when she worked from home and attended college online.

She worked and studied, maintained good grades and was compensated for it via her school and the system. Went to a community College for diploma, then worked, interned and got hired in her field of study before graduating college with a bachelor's last month with no debts in a growing field with high demand and six figure yearly salary.

She bought a primary residence 2020 with 3% down and house hacked, which allowed her to live rent free for 2 years while tenants paid down the loan. Property appraised north of $100K. So yes no capital gains tax, and didn't put any extra principal payment. Then moved out and we're sharing another house hack with less than $200 out of pocket monthly for utilities and internet while using 3 bedrooms and a bonus room for ourselves. Looking to move end of 2023 but can legally buy by end of Nov provided move in within 60 days with 5% down.

So when does she reward herself? Income reserves in excess of 6 months living expenses, no consumer debts, leveraged mortgages with no payment coming out of pocket. Ability to pay off rentals outright if needed to but won't.

I hope the above helped to provide more transparency and clarity.

So I agree to getting a car, but was against paying cash. So that's why I asked on here if cash or credit and if credit, dealer or bank financing. Using credit is leveraging, no?

Car would have cost $38,000 rounded up to the next thousand. Negotiated at dealership from $500 mthly with $10,000 DP for 75 months to $400 monthly. To me that's paying $2,000 more in total 75 months from now vs paying $38,000 upfront now. We have never financed a car before and have always bought used, driven it and resold for higher than purchased price after driving a year or 2.

Since reading on here, if we find even a 2020 Honda with all the features with low mileage and cheaper, yes that would work too.

Still planning on buying more cash flowing rentals before dipping into private lending.

@Mike Hern

Lol. Well it could. Covid taught us to be careful but it also said live a little. Can't take it with you,

@Jay Hinrichs

Thanks Jay but she wants a Honda. I even tried Toyota. No dice.

@Mike Hern

Sometimes you have to make them win. Plus looking to sell a property for her with over 100K equity after commissions, no capital gains tax .

That new car smell with 6 miles. I would say earned it.

I will check out bank financing.

@Nate Mur

Thanks Nate Honda Touring. Has all the berks and whistles.

Lol, I convinced her to sell her Honda after driving it over a year. Then came the Pandemic, so it was parked mostly. We sold for little more than we paid for it, private sale then sold it to a dealer. Today same car is worth few thousand more still.

Plan would be to drive for several years.