Hey, Guys so I purchase my first rental property in Detroit 15K plus closing which came out to 18K and rehab it at 11.5K. I also have a tenant that's paying $775 a month with a one year lease. I was trying to do a cash-out refi but loan was too low. My question is what other steps can I take to pull my cash out this property to be able to purchase another one?
@Delmas Edwards this is a very common issue. If you think about it, people have car loans for more money that this loan. Many banks just won't lend this low...but some will! You should continue to call around to different banks to see which ones have no loan minimum. Or maybe talk to your local real estate investing network group to see what lenders people use there. A couple of little pointers here: if you use a conventional loan, you will be limited to 75% of the "after repair value". Likewise, with conventional lending, you will need to own the property for 6 months. There are other loan types out there. I wrote a pretty lengthy article about it HERE Feel free to ask more questions if you need. Thanks!
Hey @Andrew Postell Thanks for the great information. The thing is that I purchased the house with cash and rehab it with cash. I'm actually trying to do a HELOC with the Penfed Credit Union. They stated that the Market Value is 33,290.00. And they'll give me 28K of a HELOC but it's still pending with the underwriters.
@Delmas Edwards hmmm, My experience with HELOC's is not good. Banks sell them so often without giving good information up front about them. If they can lend based on those numbers then that would be the greatest HELOC I have ever heard of...I've been doing this a while so I know that there could be a possibility that the loan they quoted you might happen but I have alarms going off in my head like crazy on those numbers.
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