Investor · Arlington, TX · Member since 2016 · 18 posts · 3 votes
Hello all, I have a SFR that i have about 50k equity in, I have a 15year note, payments are 995 and it rents for 1250 a month, Im thinking about selling next summer, my question is should I sell this property and invest the funds into a 4 plex or multi-family units or should i jump into the buy and flip game? I have a stable W2 but i am feeling that I either need to acquire more property to build my portfolio quicker. I have tried getting a heloc but since it is not my primary I have not had any success. So my question is what would you do in this scenario, I greatly appreciate all and any advice
Real Estate Broker · San Francisco Bay Area, CA · Member since 2012 · 225 posts · 266 votes
10y
Hey Derick,
I recently ran into a similar problem. Had several rentals with tons of equity but didn't want to sell to access it.
I ended up finding HELOC's on investment property through local credit unions. If you find one in the area where the property is located, and you also live there, there is a great chance they will underwrite for you.
I also found out Wells Fargo will do them. I have a contact there I can refer you to if you'd like.
As far as flip or long term, I'd say find a way to do both. That's how I think. Keep just enough equity for the 20% most hard money lenders want you to put down, and invest the rest. Or, flip 3 houses, then buy one. By then you should have enough bank rolled that every flip you do can go to buying another rental. If you buy the rental first, you won't be able to flip. If you flip first (and don't lose money), you'll still be able to buy the rental.
Real Estate Investor · atlanta, GA · Member since 2013 · 456 posts · 237 votes
10y
You'd be surprised....some zero down deals are back out there for investors in limited markets. We just had one brought to us that is no doc, credit line with a 720 credit score. I don't think it will be around long but we have a few frontenders with our model who want to us it. Most of our folks are all cash but some want to get into a deal and just have great jobs and credit. I saw a no doc, cash out refi today at 70% LTV.
The only thing that is constant in our business is CHANGE. I was mostly in single family rentals at the last crash and it about killed me....it was eviction court every week. I shifted to a shared housing model and I have different headaches but much higher net rents.
I like your idea to keep it. That's exactly what I would do in your shoes. I believe this next big correction to be much deeper than the last one and more of a global front. I don't know much about TX but I love austin and plan to be there in the next couple of years. With our model, we work with homeowners, investors and our own book to create shared housing. The next correction won't phase us as my rents went up on shared housing last time. You have to find your niche....and with the performance you have with this rental....its' going pretty good. Your equity gets wiped up in a correction but rent will go up and your other payments will mostly remain the same. That's not so bad. If you had the equity, you should have been able to get a credit back on the PMI. Normally refinancing takes a few years to recover your closing costs. However, if you keep it....you can't get much cheaper than what you locked into...another good reason to keep it. If the market corrects....you won't be able to get a loan anyway!