Homeowner · Panama City, FL · Member since 2015 · 31 posts · 6 votes
I am 61 and preparing for life after retirement beginning this summer. I will have 2 pensions and some rental income that my wife and I should be able to comfortably live on without immediately drawing SS when I turn 62. I would like to acquire several more SFHs in the $80-120K range to rehab and turn into rentals. My immediate regional focus will be NW FL between Panama City and Pensacola.
With the loss of earned income after retirement, I do not think I can immediately qualify for a conventional loan for investment property. I do however have about $180K in equity on three homes, neither of the three are my primary residence. I also have $50K in cash.
I am thinking that I could obtain HELOCs on a portion of my equity to add with my cash to make a cash offer and purchase of my first SFH after retirement. After I rehab the property and get a lease, I should then be able to qualify for a conventional loan on that property to free up my HELOC and some of my cash for another purchase.
@Tom Giles as @Terry Lewis said it would be a good idea to get all your financing in order now. It looks like you have four properties now. If I were you I would do cash out refinancing on these homes over a HELOC. They are fixed rate and will keep you at one mortgage for each property. I would also purchase the new investment properties while you have you current job and all the assets to meet the reserve requirements. You can consider 75 percent of the rental income on the new purchases with Fannie Mae.
Welcome to BP and I wanted to introduce myself. I am a wholesaler here in the panhandle and I primaraly focus on OFF MARKET properties from Pensacola to Destin. If there is anything you might need from me, an active wholesaler in this market, I'd enjoy helping in your win win situations. Hope that we can don one deals together and meet you at our local REIA called the pensacola investors guild or PIG.
@Tom Giles as @Terry Lewis said it would be a good idea to get all your financing in order now. It looks like you have four properties now. If I were you I would do cash out refinancing on these homes over a HELOC. They are fixed rate and will keep you at one mortgage for each property. I would also purchase the new investment properties while you have you current job and all the assets to meet the reserve requirements. You can consider 75 percent of the rental income on the new purchases with Fannie Mae.
@Terry Lewis Thank you terry, that is great advice that I didn't think about. I will start on that immediately.
@JPaul Mills Thank you JPaul, I can use all the help I can get. I have been intimidated by real estate investment ever since the horrible experience I had with my first home back in 83.
I will be living in my primary residence located 15 miles north of PC. I may be wrong but the PC market does not seem very good but the market seems to improve further West towards Pensacola. Lets definitely stay in touch.
You are correct. Destin and Fort Walton Beach are VERY HOT MARKETS. FWB especially for buy and holds. I have a Buyer that I can send my wholesale deals to in FWB and he will buy them in 24-48hrs. I have a Large MARKETING stream going out each month so finding you off market properties wont be a problem. My contact info is on my profile page so please shoot me a text or email or just call. Thanks.
@Tom Giles fascinating bio. Love that you like living out of the country and in it too. That is my ideal existence.
Gotta love those pensions. With what you have going you may very well be able to qualify for financing after retirement. But, having been on both sides of the fence, will say bankers are much more respectful when you have a w2. So, agree with posters about securing financing but will say heloc's are great for flipping. Nothing like having cash when you need it and then being able to put it back and stop the interest expense.
The time for risk is when you are working IMO. When retired we need to grow and protect. Grow because that is what we do and protect because having it made needs to stay that way. Well done and good luck.
Thank you Jerry, Jeff, & Frank, I see now I need to do a bunch of Prep work while I am still employed and I really need to rethink delaying Social Security. I will probably need to show SS income to qualify for conventional loans after retirement even though I don't need the income to live on.
with regards to getting a loan now while you still have W-2 income (it sounds like you still do). I also invest in the gulf coast area of Florida so if you need anything feel free to reach out and ask. Good luck.
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Keep in mind that the H in HELOC is for Home; i.e. your primary residence. Lenders are much less willing to lend against a house that isn't your primary residence: higher rates, lower LTVs.
If you do get a HELOC, keep in mind that you need to live in that house for a year after closing. I almost got tripped up by that one.
As another option, you can look for asset-based purchase mortgages. These loans don't look at your income, only the value and feasibility of the property. They have LTVs of between 65% and 70% and higher rates. But, they are an option.