All Forum Posts by: Craig Jeppesen

horrible idea. HML's are for short term flips or brrr only. You should never use one for a buy and hold. The rate and fees are ridiculously high and then you will have to refinance in 6 m to a year and have to pay fees again. and what if you can't refinance? You will soon have a foreclosure on your record. I am not sure why you would even consider this.

Is the loan for the new construction or rental? You are missing a lot of numbers to know the reason for the denial. If it is new construction I would guess your issue is the down pmt. let’s say the purchase is $300k, you need about $$65-$70k for the down pmt and closing; you have $35k. I doubt you can buy a new build for less than $300k, probably more. You are probably going to have to do a 10% down and you might have to shop around. Call your lender and find out what is going on.

interest only is fine for short term loans.  In the long run you want to pay down your debt as this is how you build wealth.  I have an interest only heloc which I uses sometimes for repairs on a flip, but i would never buy a rental or a house to live in with an interest only loan.

Although helpful the amount of money you make does not make you a millionaire. Time, rate of return and dollar amount invested/debt pay down is what makes one a millionaire. just run the numbers in a financial calculator or spreadsheet. 

@Anthony Wick

The economy is strong and there is a lot of money that has been made the past several years. Cap rates are shrinking as interest rates are still really low. Investors would rather make 5% in re than 1% at a bank. This is making the market very tough for first time and small investors. Deals do still come around so be patient and keep looking.

Looks like a bad deal. A 10% fee and 1-3% each time you use it. yikes.

Tell the seller the ghost goes with them, or you need a discount to keep the ghost. Haha!

Building a spec house to sell is like a flip and is inventory of a business. It will be ordinary income in the year you sell the spec house.

No, if you are flipping, buying is inventory. You don’t expense it until you sell it. Also loans have nothing to do with a taxable gain. A gain is sell price less selling fees less your basis. The gain is basically the same whether there is a loan on it or not.

You are the buyer, you want the appraisal to be low. You want the appraisal to be high when you sell. The appraiser is taking your purchase price into consideration as well. That is lowering market value. Why are you so concerned at the appraisal and what do you get for the appraisal to be higher? Nothing.