1st deal done. Now i have lost momentum pls help.

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1st deal done. Now i have lost momentum pls help.

Sage Fradley
Palmetto , FL · Member since 2017 · 18 posts · 7 votes
Hey guys, Im still at the beginning stages of establishing a path to financial freedom but I have started. I need advice about the best way to get the money out of my house to purchase my next one. Here are the numbers... I purchased a house for 169k. I put 49k of my own money and the other 120k was loaned to me by my aunt at 6% interest only. My loan with her is currently at 110k and I make a 550 payment each month. Additionally I put about 30k into it... new roof, new bath, and permitting issues ect. I currently have the house rented and take home around 340 after everything including capital exspensures. I was house hacking and just recently moved out. I am living with family now but I want to move out and do it all over again. But I have no capital. I want to get enough money to pay off my aunt and have enough left over for another house hack. Any advice is appreciated. house appraised at 205k when I 1st bought it two years ago. Im sure it's around 230 now. Sage
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  • Ernesto Hernandez
    Realtor · San Francisco, CA · Member since 2017 · 408 posts · 361 votes
    8y

    Sounds like you can take out a loan now. 75% LTV pays aunt back but you don't have to pay her back in full.

    Continue to pay her the $550 a month and now money isn't a problem. Gotta be careful with leverage though. 

    Im really new to all this. Curious to see other responses.

    0Reply
  • Ernesto Hernandez
    Realtor · San Francisco, CA · Member since 2017 · 408 posts · 361 votes
    8y

    Also, if financial freedom is your goal you probably want to focus on Cash Flow or BRRR to preserve the cash you do have.

    0Reply
  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    8y

    It sounds like a brrr, where you can now cashout refi for maybe 75% LTV which would give you around $270k to pay back Auntie and/or make another purchase.

    0Reply
  • Sage Fradley
    OP
    Palmetto , FL · Member since 2017 · 18 posts · 7 votes
    8y
    @Ernesto Hernandez Do you have any suggestions on what lenders to go with? I did look into a home equity loan at a local credit union but was only told told I could get 50k. I need to try others. One reason I want to pay off my aunt is so I can borrow again in the future.
    0Reply
  • Ernesto Hernandez
    Realtor · San Francisco, CA · Member since 2017 · 408 posts · 361 votes
    8y

    Sage. I do not. I would browse the Florida specific forums for recommendations. 

    0Reply
  • Sage Fradley
    OP
    Palmetto , FL · Member since 2017 · 18 posts · 7 votes
    8y
    @Eric James did you mean 170k? It was a SFH with two laundrys and two kitchens and each with their own front and back entrance. I lived in half and rented the other but now rent both sides out with new leases just started the new year.
    0Reply
  • Eric James
    Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    8y
    Originally posted by @Sage Fradley:
    @Eric James did you mean 170k? It was a SFH with two laundrys and two kitchens and each with their own front and back entrance. I lived in half and rented the other but now rent both sides out with new leases just started the new year.

     Yes, I meant $170k. How much is the total rent? An issue could be if the refi payment would be too high to have any cashflow.

    0Reply
  • Sage Fradley
    OP
    Palmetto , FL · Member since 2017 · 18 posts · 7 votes
    8y
    @Eric James it's at 2200 total super low friends and family.... aka fked myself a little this year but I will raise it next year. But yes cash flow is a concern ofmine as well. Paying off my aunt would only remove the 550 payment which is my only wigle room right now.
    0Reply
  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    8y

    @sage 

    @Sage Fradley I know of a few people that could possibly help you out in the Florida area. 

    [email protected]619-456-8311
    Helm Mortgage Corp.5125 Reviews
    WebsiteView Page
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  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    8y

    @Sage Fradley I'd go with a 75% LTV REFI at $230k appraised value = $172.5k. Now, you can pay your aunt back her 110k (thankfully, no prepayment penalty from her, lol).

    So, you are left with $62.5k to play with. 

    Technically, if you consider your initial DP [49k] + CapEx [30k], it may seem like it is not a good idea to REFI. However, if you are trying to scale, REFI is a better idea.

    Hope this helps. Goodluck. Thanks! - Ola

    0Reply
  • Sage Fradley
    OP
    Palmetto , FL · Member since 2017 · 18 posts · 7 votes
    8y

    Thanks for all the advice I was able to do a cash out refi conventional loan at 4.25% . It appraised at 250k and i was able to get 200k. So after paying back my aunt Im back to 80k, but with a cash flowing property :) about $300 a month Woot woot. I plan on increasing rents next year.

    1Reply
  • Mike ReynoldsPro Member
    construction · Nacogdoches, TX · Member since 2011 · 2k+ posts · 1k+ votes
    8y
    Originally posted by @Sage Fradley:

    Thanks for all the advice I was able to do a cash out refi conventional loan at 4.25% . It appraised at 250k and i was able to get 200k. So after paying back my aunt Im back to 80k, but with a cash flowing property :) about $300 a month Woot woot. I plan on increasing rents next year.

     Way to go Sage. Now time to get busy and find the next one. 

    0Reply
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