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Private Lending & Conventional Mortgage Advice

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Grant Baker
  • Homeowner
  • Wadsworth, OH
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Would a Equality Loan work with BURR

Grant Baker
  • Homeowner
  • Wadsworth, OH
Posted Aug 21 2019, 05:35

If my parents are willing to help me out with a equality loan, can I use that to BURR? But a house with the equality loan then refinance and am I able to then buy another house with it ?

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Jason D.
  • Rental Property Investor
  • St. Petersburg, Fl
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Jason D.
  • Rental Property Investor
  • St. Petersburg, Fl
Replied Aug 21 2019, 05:42

@Grant Baker yes. That's exactly the process. Buy with the equity loan, fix, refinance, pay off loan to use again.

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Grant Baker
  • Homeowner
  • Wadsworth, OH
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8
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Grant Baker
  • Homeowner
  • Wadsworth, OH
Replied Aug 21 2019, 05:42

@Jason D. Perfect just wasn’t sure if that could work! Can I also use the equality loan to pay for rehab also?

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Jason D.
  • Rental Property Investor
  • St. Petersburg, Fl
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Jason D.
  • Rental Property Investor
  • St. Petersburg, Fl
Replied Aug 21 2019, 05:45

@Grant Baker of course! That's the ideal situation, no money put of your pocket

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Grant Baker
  • Homeowner
  • Wadsworth, OH
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Grant Baker
  • Homeowner
  • Wadsworth, OH
Replied Aug 21 2019, 05:51

@Jason D. Thanks a lot! Yeah only 19 and my parents are willing to help out. Now I don’t know much about an equality loan so are there any downsides for my parents ?

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Jason D.
  • Rental Property Investor
  • St. Petersburg, Fl
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Jason D.
  • Rental Property Investor
  • St. Petersburg, Fl
Replied Aug 21 2019, 08:09

@Grant Baker there could be some credit downsides. Because you are going to be utilizing a large percentage of a large line of credit, it could affect their ability to get credit if you are maxing out that line.

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Jesse Hobbs
  • Specialist
  • Florida, (East Central)
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Jesse Hobbs
  • Specialist
  • Florida, (East Central)
Replied Aug 21 2019, 14:53

@Grant Baker How long are your parents looking to let the equity loan? The only problem with you using Brrrr, is that you are not going to see 200% return. The money you make will either be given back to your parents or to buy another house. You will need to buy and rehab smartly so you not only not leave money in the home but hopefully pull more than invested out. I am no pro, but this is what I understand from reading David Greene's book on the process. Good luck.