Accessing my equity

[George Carnicle]

Hello everyone!

Disclaimer: I listened to every podcast on my daily 7 mile round trip bike commute to my jobs before pulling the trigger to purchase a house / investment property. AND I did read the "recent" forum discussions and tried finding more information on the blog before posting this. However if I missed the answer somewhere on the site please link to it and I will save us all some time and read that! :) Thank you in advance for your help!

My story:
My wife and I are expecting our first live baby in November (we lost a daughter at 37 weeks pregnant last December) and until then I'm working 2 jobs that keep me busy 7 days a week. The money is nice but I'm really looking forward to being a dad!

Thanks to Zillow.com and Homesearch.com we found a Jacksonville, FL, 1'800 sq ft, 3/1.5, on .3 acres, with pool foreclosure for auction and won the bid for 30k including all fees and closing costs. I pieced together the cash needed for the deal through an interest only loan from a friend (15k at 7% interest only for 2 years, with option to renegotiate at the end or pay off in full) and a personal loan from my bank (15k at 17% fully amortized over 3 years). The house is completely mine free and clear. It is not collateral for my existing financing package. The total cost to me per month is $587 which is $150 less than I currently pay in rent on a 2/1 apartment. We closed on this house on 8/5/14 and will be moving into it this coming weekend.

My question:
How and when can I get access to the equity I purchased in this house? By my very conservative estimate the house should appraise for at least 80k today and possibly for as much as 150k once updated as planned. I understand there is a "seasoning" period of 12 months from the date I purchased it. Is there any way for me to get a HELOC or equivalent sooner than that? I plan to use the funds to acquire more pieces of my real estate empire and would really like to start sooner than later.

Thank you for at least making it to the end of the post! I would be honored to get your thoughts on the deal and greatly appreciate any help on accessing my equity!

[Jeff Pollack]

@George Carnicle

Congrats on the house purchase.  Something you said caught my attention"

".......short of liquidating my 401k...."

You have a 401k? Federal law allows you to borrow from your 401k to the tune of $50,000 or 1/2 its value, whichever is less. The details vary based on your account custodian, but you can borrow at about 4.25% (give or take) fixed and amortized over 5 years. I don't know what you have in your 401k, but if you have $60k you could borrow $30k from it and pay off your high interest loans. At 4.25% your monthly payment is $555 and you are paying YOURSELF back. A loan from your 401k also does not show up on your credit report or affect your DTI.