Advice on buying house
Need advice:
HOUSE #1 - I own house valued at $300,00 and only owe $7,000. I rent rooms and garage apartment to traveling nurses totaling $4,200.
HOUSE #2- 5 BR , 3 Bath House on same street closer to hospital needing rehab. Price is $150,000 ARV $350,000 and up depending on market. I plan to hold and rent rooms
OWNERS: My next door neighbor. Have accepted offer of $150,000. They will accept $50,000 down, owner finance $100,000 for two years and close. They said they don’t want to get everything at once because of taxes.
ME- 68 yr old woman who has been investing in houses for 15 yrs. Eventually was able to buy last house with cash plus $15,000 owner financing. I now owe $7,000 on last house.
FINANCING IDEAS:
1. Refinance my house which seems to be the common scenario on BP. Will I get enough to buy and rehab house which will cost $150,000 to buy and $100,000 to rehab.
2. PRIVATE LENDER: Suggestions of private lender?
4. Hard Money: Of course this is an option but most require 20% down and I don’t have that much cash to put down
3. Utilize Reverse Mortgage $150,000 and private lender. I like the fact that I wouldn’t have a note with a RM but it won’t cover the rehab part
Thank you for any ideas or help with directing me to right loan company or person.
Janet Taylor
Hi Janet! Congrats on the success you have had so far! As a private lender, I can't say all our terms are the same, so my loan terms and requirements may be different from others. A true private lender tends to be very flexible, so there are a variety of ways this could work. For example, a private lender may be able to cross collateralize with the property that you have significant equity in. They could also potentially do that for any other property that is not your primary residence. Private lenders may be a bit hesistant to offer a second lien on a primary residence as some states (even if the loan is for business purposes), have very stringent requirements for loans on a primary residence. You can also consider bringing in a short term partner who will provide assets, you can finish the rehab, and then sell to pay back the lender and the capital partner.
Hi Janet!
I would be curious to see if you could get a HELOC on your home or partner with one of these home equity companies that requires paid after so many years.
The HELOC would be ideal since most of them have int only draw period for 10yrs and then become fully amortizing afterwards. This would likely allow you pretty decent cashflow while you work on the repairs. Some credit unions will go up to 100% if owner occupied while lenders like Lower,Huntington, PNC etc will usually go up to a max of 95%
Congratulations on the new acquistion!
Thank you for your input. I would be interested in speaking to those who have responded to get more information. I will reach out later in the week.
Janet
I forgot to mention that the majority of my income is from my rental house. I have only been renting for a year and lenders will not use this income for a loan. This puts me in a position of needing a creative approach to financing. With that in mind would the programs you mentioned still be an option?
Hi Janet - Happy to connect and help in anyway I can.
Kit Serrell
Loan Officer
NMLS ID# 2349806