cash offer then home inprovment loan

11 Replies

I am thinking of paying cash on the house then getting a home inprovment loan to fix it and rent it out as the home inprovment loans are at a lower intrest rate. any advice ?

@William Frantz , anytime you can borrow money in order to make MORE money, why not? The trick is to have got your sums right. For example, in Youngstown (and many other parts of Ohio and the mid-west), the cost of rehabbing a home is often GREATER than the original purchase price. What will your Lender think of that? All the best...

Thanks for your comment Brent I am not sure how they aprase a home for a loan on the purchase price ?market value? aprasil?

@William Frantz , my understanding is that it is common for a Lender to loan 75-80% of (as-is) appraisal value - the Title is then held by them as their security. [But, they might not allow that much! Check around]. Be aware that if you borrow your maximum allowable in order to complete your rehab, that doesn't mean that your home will subsequently be worth 175% of your purchase price! Again, you will need to get your sums right. Cheers...

@ Brent Coombs

Thanks Brent can I use the house I live and get a loan on it to work on the other house?

Originally posted by @William Frantz :

@ Brent Coombs

Thanks Brent can I use the house I live and get a loan on it to work on the other house?

 Sure. Lenders will take any Title off you that they can! (Which will then make it VITAL that you get your analyzing sums right)...

@Brent Coombs Hello again mate! I heard you've still been working with Terry, glad that worked out for you guys.

@William Frantz I would recommend talking to a state chartered bank such as Home Savings or Talmer Bank & Trust. The state chartered banks are much more investor friendly & will be more flexible on products & options. Lisa at Home Savings in Poland is a great resource.

@Nathan Bibb , hi Nathan. Yes, Wes has continued with Terry (but hopefully will not be requiring his services for that first Y'town investment too often from now on). Of course, you were one of the BP contacts I referred to in summarizing Wes's story in this other thread yesterday:- http://www.biggerpockets.com/forums/311/topics/227...

We'd love to visit again sometime. Trusting all is well with you and yours. Cheers,,,

@Brent Coombs we have actually started selling properties to Australian investors based out of the Newcastle area. Small world!

@Nathan Bibb , Ha! Is there any chance that your way of getting those Aussies educated is to just steer them in the direction of BiggerPockets?... 

@Brent Coombs Terry the contractor just stopped by our office & said you guys are in the market looking for more property to buy in the area. If so, get in touch.

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