I want to share my story. It's about my existing home and what happened to me over the past six years. First I'd like to give a brief overview of my house: My wife and I bought it 15 years ago and moved in with our three children. We moved from NE Philly PA to the northern suburbs (Lower Bucks County) We paid $191,000. in Nov.1999, great time to buy! Prices quickly when up and we borrowed 125k against the equity with a home equity loan from WF bank at 12% with the understanding that the rate would go down to 6% after one year of on time payments, or so the WF representative said. He lied! So now I was stuck with two $1,500. payments each month for the next 15 years. Total $3,000. per month. I'm a home improvements contractor that specializes in kitchen and bathroom remodeling. I have a very small business and do everything myself, so my income is modest. My wife works at the local high school as a teachers assistant in special ed. In August 2009 I had the challenge of my life. I was hospitalized for 23 days with a severe case of Diverticulitis. I had to undergo intestinal surgery and had a colostomy bag for two months, I was in and out of the hospital for two more surgeries over the next 4 months. I couldn't work for almost nine months total. We almost lost everything, including the house. I was able to negotiate with my credit cards and get through a couple mortgage modifications, just before being foreclosed on. Over the next four years I worked as a subcontractor for a high end kitchen and bath company, just barley making ends meet. Over the past year and a half, I have been back on my own running my business but have been battling yet another intestinal disease (Ulcerative Colitis) I somehow managing to pay my two mortgages on time for the past two and a half years, so I applied for a refinance of the two mortgages (1st @ 6.375% and the 2nd @12%) into a 15 year fixed rate mortgage. We literally signed the closing papers on Christmas Eve 2014, Thank you!! Now I can breathe again. My new mortgage is a 15 year @ 3.875%, we had to roll $5,000 in credit cards into it but we will be saving $1,200. per month for the next year and about $700 per month for the next 14 years after that. The past six years put a huge amount of stress on me and my family. But i guess what doesn't kill you makes you stronger. Now I'm faced with a big decision, at age 50, do I continue to beat my body doing home remodeling with by the way two hernias busting out of my gut till god knows what age? Or do I do what I've been wanting to do for the past 15 years, (Flip houses)? I think the answer is clear and being here on BP is a great place for me to learn and to get my butt into gear. My goal is to buy four properties within the next year and to become a full time REI. My biggest challenge is getting started with limited funds, I have 100k in equity in my home but would like to start out without tapping into it. I'm talking to some repeat customers who I feel would make good investors and have a couple on board. I'm also looking for some mentoring and other sources of funding to get my first deal started. I'm looking in the Levittown PA area and the Trenton NJ area for my first deal. Any feedback would be appreciated. Thank you, Nick
Glad to hear your mortgage situation is much better. I would focus a year or so on learning real estate and making sure your personal financial situation is stable. This also should let you start to build up a down payment without resorting to a loan on your equity. If you can put equity into a deal, you will be in a much stronger position for a partnership.
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