All Forum Posts by: Zach Hawrot

Looking to purchase a single family property with a vacant house next to it. The goal is to get that vacant property in a sheriff's sale and tear it down since it's in such poor shape. Here is my question:

If I buy the single-family property and tear down the neighboring vacant, would I be able to parcel both properties together and refinance off that now that the overall property has doubled in size? 

Congrats on your first duplex,  Daniel!

Are the utilities in your name or the buyers? I ran into an issued on a duplex where I had each unit's utilities metered to each tenant. My issue was how do I have a shared laundry space when the utilities for the laundry could only be metered to one tenant.  

@Robert Fornwalt 10k max is needed for renovation. Since everything is low costing, plan is to use the cash flow as main consideration when we do refinance. 

Everyone else...thank you for the posts! Helps a lot. 

After meeting with my bank, I told them I wanted to refinance my duplex after I made the proper renovations. They advised since the duplex was cheap to start at 25k that it would make better sense to take out a HELOC against the property after renovations were done. Their pitch was this:

I would have to pay 2-3k in fees to get it refinanced whereas the HELOC would be free through them and that even though the HELOC would be 2-3% higher rate, it would take years to make up for what I would pay in closing costs. And at that time I could simply do a portfolio refinance loan with all of my other properties I BRRRR'ed through HELOCs.

Besides having to find more banks since there seems to be a limit on HELOCs, can anyone steer me why this would be a good/bad strategy when compared to traditionally refinancing with closing costs attached? 

Thanks!

After meeting with my bank, I told them I wanted to refinance my duplex after I made the proper renovations. They advised since the duplex was cheap to start at 25k that it would make better sense to take out a HELOC against the property after renovations were done. Their pitch was this:

I would have to pay 2-3k in fees to get it refinanced whereas the HELOC would be free through them and that even though the HELOC would be 2-3% higher rate, it would take years to make up for what I would pay in closing costs. And at that time I could simply do a portfolio refinance loan with all of my other properties I BRRRR'ed through HELOCs.

Besides having to find more banks since there seems to be a limit on HELOCs, can anyone steer me why this would be a good/bad strategy when compared to traditionally refinancing with closing costs attached? 

Thanks!