Purchasing a 2 house 3 trailer property with a HELOC on my home. This enabled me to make a cash offer and quick close. Should I refinance once the purchase is final and pay back the HELOC? Pros and Cons? Thank you!
That kind of property (the 2 house, 3 trailer property) will be difficult to refinance. Perhaps you can use the improved cash flow to pay it off. ANd then use it again on another purchase.
@Kerry Baird I started out down the commercial loan trail and saw quickly that it was going to be a struggle and probably kill the deal waiting on the lender to tell me I needed more cash in it. Figured with the purchase behind me I could work towards pulling my money out of it.
It will also be a problem (even a small one) to sell, as your future buyer would need financing. This could be an opportunity to sell with owner financing, and create a different stream of income. Or find a way to split the lot so one property is on its own lot. Or...other creative idea...?
@Kerry Baird it’s been for sale for a few months. Started at 199 and down to 165k. Rents are only 2.5k and at the low end should be 3k. It will cashflow well and there is upside on rents.
Price relates to the number of buyers. Most buyers will be owner occupied, residential. This is not a vanilla deal.