jacksonville, FL · Member since 2010 · 83 posts · 17 votes
I was wondering what restricts people who say want to buy 2-3 homes buy only have 75k.
If I bought one home for 50k cash and moved into it, fixed it up etc, how long (if ever) would it be before I could take a heloc on it in an average circumstance to buy another home? Seems like there would be some restrictions.
You probably wouldn't get more in credit than you paid for but at least some of that money could be put back to use.
I don't have the ability to buy the home i bought without cash so i had to do it, was wondering if people ever did this instead.
Im just wondering of a strategy to make my finds go further and buy multiple homes.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
A potential better alternative is to find private money and use the free and clear home as security. You may pay more in interest, but so long as you use the money to gain higher returns than what you pay, it is worth it.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
In today's lending enviro, HELOCS are more and more uncommon and as such, more difficult to get. You may be stuck with getting a cash out refi loan for a fixed rate term. These usually require 12 months of seasoning in this market so expect to wait for 12 months (6 months minimum)
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
A potential better alternative is to find private money and use the free and clear home as security. You may pay more in interest, but so long as you use the money to gain higher returns than what you pay, it is worth it.
Cincinnati · Member since 2011 · 77 posts · 16 votes
15y
I don't know much about Helocs, but why not fix & flip the first house and do it again and again, until you have the money for the 2-3 houses you want to hold?
Another alternative is to buy with seller financing. But with this, you have an ethical duty not to screw the homeowner over, so make sure you have the cash reserves to handle it when things go wrong.
Rental Property Investor · St. Louis, MO · Member since 2008 · 189 posts · 75 votes
15y
Thomas,
I just got a HELOC on my primary residence that I purchased 9mo ago and did a 80K rehab on. Between my HELOC and my mortgage I am well over what I paid for it including the rehab cost. It really comes down to what it will appraise for and what you already owe on it assuming you meet debt to income limitations and have good credit. My bank allowed up to 90% loan to value.
jacksonville, FL · Member since 2010 · 83 posts · 17 votes
15y
mike, thats awesome... its in my wifes name who has 730 credit score and we bought it out right... the tax value is 111k and houses are selling for 65-75k if by bank and 90k if by owner
i paid 50k on it and want to use that money somehow to get another house or 2.
my wife has low income and i felt like we had to bid cash to get it. I think the low income is going to screw me but income for 2011 should look better for her. did u go with a big bank? Was the heloc with the same place as mortgage?
Rental Property Investor · St. Louis, MO · Member since 2008 · 189 posts · 75 votes
15y
It is with US Bank, I don't have my primary mortgage with them but i do have a rental mortgage and chekcing account there. They go up to 90% LTV so you should be able to get 63K if it appraises at what you think it should. At the current rate of 3.99% your monthly payment would only be around $200/mo so low income may not keep you out.