I have two properties in the Tulsa area of Oklahoma I bought in August; both were land and mobile home purchases. One I paid cash for, the other I put money down and the owner carried back the balance. The twist on the owner carry is that the deed does not show a mortgage lien held by the seller.
So, I want to BRRRR these. Are there options to either get a first mortgage for each (or one for both), or get a HELOC for one or both? I know having mobile homes presents more challenges for financing options.
The purpose for cashing out is obviously to payoff the owner and go find a multi family to then also BRRRR.
Thanks in advance for any support, guidance and/or suggestions.
Helocs are a great reversable method to getting at dead equity.
Once you get proof of concept then you can sell or get a new loan on the equity.
@Lane Kawaoka , thanks for the feedback. Am I to understand that a HELPC maybe a good short-term plan, and then try to convert the heloc to a first mortgage, is that right? Or did I miss a step?
I can’t speak to the MH side of it, but basically:
A HELOC is great because as a line of credit you're only paying interest for the money you're using right now. Flip a house, sell it, pay back the HELOC and you're no longer paying interest until the next time you need money. The downside is that rates are a bit higher and are variable... so if they go up in 1-5-10 years, you're going to have to pay more.
A mortgage is great nowadays especially since rates are very low. Lock in a 4/5% rate for 30 years and you’re golden. The chance of rates being this low in 5-10 years is slim.
Both vehicles are great, it’s just what makes the most sense for your plans!
@Mike McCarthy , thanks much; that helps.
So, the strategy either way seems sound based on the purpose for which to use the funds. Good deal.
The next part is trying to determine which resources may be best suited to provide one of the two with respect to mobile home properties.
Exactly its a short term plan to eventually sell or cash out refi
How did you find the land/mobile home deals? I am interested in purchasing these or a whole mobile home park.
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