Ive got shallow pockets currently, looking to make my first deal in the next six months. I own my primary residence and have $200k of equity, maybe a little more. I also have a $70k in liquid savings and the ability to obtain a conventional loan. What strategy would you use to finance your deal. Cash out re-fi on the primary residence + savings or just take a loan and put 20-25% down to make the deal.
Pros and Cons of each method please.
Thanks for your insight!
@Ken Vogel A conventional loan costs you at least 3% in closing costs. Forget that! Look at the Line of Credit against either property. Costs are less, more flexible terms. The line is put against the house just like a 2nd, so no difference there. Only pay for what you use and put it back. TD Bank has a pretty cool program, $99 origination fee, $50 annual fee, 75% LTV, 4.49%. There are lots of LOC options for a primary residence.
Once you get the new property, get a note on it and put the funds back into the LOC. You can get Buy-Fix-Flip or Buy-Fix-Rent terms easily, with 640+ credit out there. No reason to put your savings at risk. Best of luck to you.
@Jack Bobeck Thanks for the reply. Can you clarify what you mean when you say, "Once you get the new property, get a note on it"
Are you saying re-finance it?
Originally posted by @Ken Vogel:
@Jack Thanks for the reply. Can you clarify what you mean when you say, "Once you get the new property, get a note on it"
Are you saying re-finance it with a traditional fixed rate loan or are you illuding to something else?
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