New to Real Estate · San Antonio, TX · Member since 2017 · 16 posts · 1 vote
So I bought a live-in-flip in January in San Antonio, Texas. I will be done by the end of April and ready to put it on the market. I am looking for some opinions on what my ways forward are. Here is my scenario. I have my wife and two kids with me. Recently my son has been going to therapy for acting out. The therapist told us it would be good to keep him in a stable environment (he has never been in one... I'm military). Anyways, If I cant find a deal in the school district then I will have to figure out another ways to re-invest the flip money.
I bought the house for 180k+10k in reno ARV is about 230-240.... Here is what I have come up with
1. Sell the house, cash out, pay the taxes, repeat (in school district)
2. Refi, pull % of equity out, continue living in the house, re invest
3. Refi, get an equity line of credit, continue living in the house, reinvest in something outside of live-in-flips
What do you think is the best option and or what other options do I have??
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
7y
@Ryan Rossi, if you can tough it out for a year in the house, you'll at least only pay the long-term CG taxes, which may be minimal depending on your other income.
Why refi? I don't see the point in paying the extra closing costs.
How about staying put for the rest of the year? Take out a HELOC (some banks go as high as 95-100% LTV) to fund your next deal. This gives your son some stability and gives you time to find the right property in the right school district.
Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
7y
@Ryan Rossi, if you can tough it out for a year in the house, you'll at least only pay the long-term CG taxes, which may be minimal depending on your other income.
Why refi? I don't see the point in paying the extra closing costs.
How about staying put for the rest of the year? Take out a HELOC (some banks go as high as 95-100% LTV) to fund your next deal. This gives your son some stability and gives you time to find the right property in the right school district.
Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
7y
You will not be able to refi and get cash out. You are at about 80% of value, which is good, but you can only get out up to 80%. You can refi, but only rate and term.
By the way, there is not going to be a crash. There will be a stabilization of prices as rates go up(if they do). The crash will happen in the next cycle in about 10 years 2027, maybe 2028.
My wife and I just rehabbed our house. Bought 105k, put 125k into it, worth about 275k to 300k. We see the equity as our piggy bank. We plan to hold at least 2 years so that when we sell it we will pay no tax on the profit.
New to Real Estate · San Antonio, TX · Member since 2017 · 16 posts · 1 vote
7y
@Rick Pozos what about a re-appraisal and HELOC? Possible? If so,I have heard you can use LOCs for pretty much anything from Dwn Pymnt to cash at auction...??
Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes
7y
@Ryan Rossi Texas law states that you can only go up to 80% of the home value for a heloc minus what you already owe. There is no room for a heloc on your property. You have to buy at a super duper discount AND get repairs done with a good contractor or do yourself to have over 20% equity in a house almost immediately.
With the tax value at 200k you probably have a retail price of about 215, maybe 220k. Even if you get an appraisal at 230k you will only be able to get a heloc for about 4k because you still owe 180k. Plus it will cost about $500 to get an appraisal.