Recently got into BP forums and it seems like there are a lot of knowledgeable people willing to help.
I am planning to get into Real Estate Investments, targeting passive income. As of 2018, I do have approx. $1.1 mil + equity in my property (no liens, and very good credit score)
Since I am running a business on my first level of my home, I couldn't find any financial institution to secure me a HELOC (apart from point.com which doesn't seem a good deal for me)…apparently, the lenders don't like mixed commercial/residential type of business (e.g. assisted living). I don't want to sell unless I will be able to get going and generate some revenue from a REI. Not sure if I can secure private and/or hard money. So financing it is an issue.
I have experience with several remodels, additions and gut rehabs for my properties where I was the GC (planning, permits & inspections, subcontracting)
I can probably start small and purchase cheaper properties with cash (around $100k+) and rehab/remodel/rent/flip and build up a portfolio. However, I was wondering if I can jump to my goal faster.
Buy a lot and build two vertical five plex row townhomes, approx. 1,200/1,400sf each (garage at the bottom) in a B neighborhood, and hold. Looking for 10% or higher CAP rate from rentals…better returns than index funds
Buy and rehab/remodel an existing apartment complex in a B neighborhood and hold…I rather do the former (low maintenance)
I was thinking Orlando, Tampa, Jacksonville areas…good demographics, steady real estate appreciation, low unemployment, relatively low real estate prices… I currently live in Seattle area and the prices are extremely high for this kind of project.
I am willing to temporary relocate or commute in order to manage the project (wife will take care of the existing business).
I am looking for advice, suggestions, comments
Here is the biggest advice I can give you based on your Goal. As a newbie in investing I would pursue the Buy and rehab/remodel of an existing apartment complex because building on an vacant lot with no experience as a newbie is going to be very hard to obtain financing with most commercial lenders.
Building a property from the ground up on a vacant lot/land is called a "Ground Up Construction Loan" and most commercial lenders will not do this unless you can show and prove that you have done several ground up construction deals within the last 24 to 36 months. Newbies do not normally get approved for Ground Up Construction Loans.
Also, be very careful as it relates to vacant lots. You have to ask yourself it this "raw" land or "developed" land. Raw land typically has no permits, utilities, etc...the land has to be "developed" with these things before you ever build on it. Developed land for the most part already has these items done. Many, if not most, commercial lenders do not lend on Raw land projects regardless of your experience unless they are very large land projects typically $25 million or more.
I hope this helps you at least in the commercial financing area. Much success!
Hi @Catalin B. ! I'm an investor and owner of a real estate brokerage here in Tampa. I'd love to set up a conference call with you and our team to assess your goals and put together a strategic plan to achieve them. We have practically everything in house between an investment division, subcontractors ready to work, hard money lending, project management, and property management. Send me a message and we'll set up a time to get you started.
A HELOC may not be the best solution for you but we handle mixed use refi all the time