Hello all! 👋🏾 My husband and I are new to real estate investing. We just bought our first 3 SFH (buy and hold) in Columbia, MO. We bought these from my dad, who we didn't realize was essentially a slum lord 😳 (sadly, he didn't realize this either 🤦🏾♀️). We didn't have inspections or anything done since we were buying from family. Needless to say, we have learned our lesson there. Anyway, we have one house that will be vacant within the next few months and it will most likely be a gut rehab (3 bed, 1 bath, 912 sq ft). We are having an inspection done and walking through to get bids for the rehab within the next few weeks. The whole layout is pretty funky as it was built in 1930. I think redesigning the layout would really improve the house, but I know nothing about designing or floor plans or anything (I am a dentist by day 🦷 ) Is there a good floor planning software that is recommended or would you hire a professional to help figure out how reconfigure the space? Also, ideas for financing the rehab? We've depleted such of our funds buying these 3 houses and we're in the process of rehabbing one of them currently. I was considering opening a heloc. Any and all suggestions are welcome! Thanks so much 🙏🏾
Hey @Caitlin Chamberlain In regards to financing your renovations a HELOC on your primary residense is going to give you the cheapest access to funds. That is assuming you have enough equity in your house to do so. If you need a little extra funding I would consider looking into a ULOC option. Most do not know about these unsecured lines of credit. They are a credit based product that can be perfect for funding small renovation projects. I know of four lenders that have access to these lines.
Hope this helps!
@Jason Shackleton do you think a cash out refi would be a poor choice since we’re already in a 30 year fixed loan with a good interest rate? The heloc would have to be taken out on another one of our rentals, as we don’t have enough equity in our personal home.
Hey @Caitlin Chamberlain It is all about ROI. Accessing funds with a cash out refi will very likley be your cheapest source of funds. However by the sounds of it at the moment you do not really have that much equity to access either in your principle residense or in the rentals. One would really need to sit down and crunch the numbers. Does the amount of equity you are able to access justify paying the mortgage breaking fees? If not a ULOC option could make sense. However ULOC's are only really intended to be used for smaller renovations as when they are in use they carry a high interest rate.