OK, so a deal came on the market within the last 24hrs that I think I may want to make my first as-an-investor offer on. But...I have no liquid funds. Can I make an offer with financing up in the air? Isn't it customary to put the type of financing I expect to use to close the deal in the contract? What if my financing plans are "take out a HELOC which could take 60 days to close and I very well could ultimately be denied for, blowing up the deal." Is it still worth it to submit an offer?
I am working with an investor-friendly agent but I wanted to ask here before I ask them and look like a fool and have them think "this guy has no clue what he's doing" and kicks me to the curb.
What if my financing plans are "take out a HELOC which could take 60 days to close and I very well could ultimately be denied for, blowing up the deal." Is it still worth it to submit an offer?
Well, it's America, so you are free to write the offer. And they are free to throw it in the trash can.
¯\_(ツ)_/¯
John, and this is for the lurkers too: Whoever you are reading this, that means some part of you is interested in real estate. If you have the equity, you almost have what most people that want into REI do not have -- ready access liquid to capital.
Go apply for and open that HELOC now. Keep the balance at $0.00. You will pay some nominal fee, like $75/year, to keep the HELOC open with zero balance. $75/year is nothing, and what it gets you is ready to write an offer the second that killer deal you've been waiting for this whole time crosses your desk. Lurkers, go open that HELOC now. John, go open that HELOC so you don't miss out on the next one.
For people years and years away that are just reading this who like the town they live in and will probably be there for another 5 to 10 years or more, go do the NYT rent vs own calculator, and buy a house for you and your family. 5% down gets you in the door of homeownership and off the rent treadmill, and if you get fortunate with appreciation, there's your REI down payment. Dumb luck with appreciation (sometimes it's more research than dumb luck) paired with a HELOC, believe it or not, is one of the most common ways people get started. HELOC funds can make it a cash purchase, or those HELOC funds can be a big fat 25% down payment paired with a traditional mortgage for 75%. What's 75%+25%? It's 100%. Look, 100% financing. Boom, there's your golden ticket, 100% financing on an investment property. Done. Stop messing around and let this be your call to action. Renters are not eligible for dumb luck (or research) HELOCs.
What if my financing plans are "take out a HELOC which could take 60 days to close and I very well could ultimately be denied for, blowing up the deal." Is it still worth it to submit an offer?
Well, it's America, so you are free to write the offer. And they are free to throw it in the trash can.
¯\_(ツ)_/¯
John, and this is for the lurkers too: Whoever you are reading this, that means some part of you is interested in real estate. If you have the equity, you almost have what most people that want into REI do not have -- ready access liquid to capital.
Go apply for and open that HELOC now. Keep the balance at $0.00. You will pay some nominal fee, like $75/year, to keep the HELOC open with zero balance. $75/year is nothing, and what it gets you is ready to write an offer the second that killer deal you've been waiting for this whole time crosses your desk. Lurkers, go open that HELOC now. John, go open that HELOC so you don't miss out on the next one.
For people years and years away that are just reading this who like the town they live in and will probably be there for another 5 to 10 years or more, go do the NYT rent vs own calculator, and buy a house for you and your family. 5% down gets you in the door of homeownership and off the rent treadmill, and if you get fortunate with appreciation, there's your REI down payment. Dumb luck with appreciation (sometimes it's more research than dumb luck) paired with a HELOC, believe it or not, is one of the most common ways people get started. HELOC funds can make it a cash purchase, or those HELOC funds can be a big fat 25% down payment paired with a traditional mortgage for 75%. What's 75%+25%? It's 100%. Look, 100% financing. Boom, there's your golden ticket, 100% financing on an investment property. Done. Stop messing around and let this be your call to action. Renters are not eligible for dumb luck (or research) HELOCs.
intrigued about using 25% of heloc as down payment and 75% traditional mortgage for rental investment property..so how do you handle the heloc once you acquired the rental...just make normal payments on it and your traditioanl mortgage as well..? whats the steps after you have property regarding the heloc and traditional mortgage anything else need to be done?
What if my financing plans are "take out a HELOC which could take 60 days to close and I very well could ultimately be denied for, blowing up the deal." Is it still worth it to submit an offer?
Well, it's America, so you are free to write the offer. And they are free to throw it in the trash can.
¯\_(ツ)_/¯
John, and this is for the lurkers too: Whoever you are reading this, that means some part of you is interested in real estate. If you have the equity, you almost have what most people that want into REI do not have -- ready access liquid to capital.
Go apply for and open that HELOC now. Keep the balance at $0.00. You will pay some nominal fee, like $75/year, to keep the HELOC open with zero balance. $75/year is nothing, and what it gets you is ready to write an offer the second that killer deal you've been waiting for this whole time crosses your desk. Lurkers, go open that HELOC now. John, go open that HELOC so you don't miss out on the next one.
For people years and years away that are just reading this who like the town they live in and will probably be there for another 5 to 10 years or more, go do the NYT rent vs own calculator, and buy a house for you and your family. 5% down gets you in the door of homeownership and off the rent treadmill, and if you get fortunate with appreciation, there's your REI down payment. Dumb luck with appreciation (sometimes it's more research than dumb luck) paired with a HELOC, believe it or not, is one of the most common ways people get started. HELOC funds can make it a cash purchase, or those HELOC funds can be a big fat 25% down payment paired with a traditional mortgage for 75%. What's 75%+25%? It's 100%. Look, 100% financing. Boom, there's your golden ticket, 100% financing on an investment property. Done. Stop messing around and let this be your call to action. Renters are not eligible for dumb luck (or research) HELOCs.
intrigued about using 25% of heloc as down payment and 75% traditional mortgage for rental investment property..so how do you handle the heloc once you acquired the rental...just make normal payments on it and your traditioanl mortgage as well..? whats the steps after you have property regarding the heloc and traditional mortgage anything else need to be done?
One prudent/conservative strategy is to use your positive cashflow to pay the HELOC down. Or you can just keep paying interest on that adjustable rate debt, if you wish. Or you can roll it into some 30YF mortgage during a cash out refinance (many people consolidate it into that very same property's mortgage, since it had enough equity for a HELOC it probably has enough to do this). Anything ARM these days, IMO, the plan should be to pay it off/down/refinance ASAP. The era of historically low rates will not last forever.