All Forum Posts by: Lance Luvaul

Hi BP: sorry, two questions in one:

A: If I refinance 3 hypothetical conforming/secondary loans into 1 big loan, does that reduce the number of loans that count against my limit of 4?  (And maybe a 3rd question: is the limit actually 10 now?)

B: My loan broker told me my 3 existing portfolio loans counted against my limit of 4, but I thought the limit was only for conforming/secondary loans?

I think I'm going to pass on it for now.  I'll continue investing in the town, and travelling there.  And while doing so maybe I'll try to build up a rehab team.  Maybe then (and with more experience under my belt) I'll be more equipped to take on a remote rehab.

Thanks to all who replied: @J Scott, @Steve Rozenberg, and @Will Barnard

Cool, now I can modulate my expectations!  Thanks for the feedback Bill

Thanks @Bill Walton. So cash out at 75%, or purchase at less than 75%... and those values are largely due to the pricepoint? Interesting. What if I used all 3 of my existing properties in the transaction: 112k (46k equity) + 102k (24k equity) + 110k (29k equity). Would it improve the LTV since it's a larger loan? And at what point does it begin to fall into commercial loan territory?

@Will Barnard: all members of my team, and my current properties, are in the town where this rehab is located... I just do not have a project manager on my team.  Never had the need before: this is the first time I've contemplated buying a fixer-upper (all my others were purchased move-in ready).

My team is currently composed of those roles you'd expect of a buy and hold investor (RE agent, property manager, repairman, insurance & mortgage brokers, attorney, bookkeeper & CPA, etc.); I've assembled this team over the last 4 years of investing in the town (including several trips there to meet them, and buy property, in person).

Put another way: I'm *way* more confident buying in this town halfway around the globe than I am buying in the city I live in.  Strange I know.

Having said that, all the comments here almost have me convinced just to walk away from it!

Just wanted to report that my credit application was accepted!  Just waiting on the card in the mail now.  My first credit card in the US in 10 years... I'm finally on my way to building my credit profile back up!  I'll be adding another credit line here in a month or two when I ask AMEX to transfer my acct from Australia to the US (they have a service where they use your credit in a foreign country to help your application in the US).

Just wanted to thank all those who helped me by replying to my original post :)

Hmm, 9 hours and no comments on my post yet... I must have made it too long-winded :)

So here's a summary: Can I combine a refi on an existing unit with a new loan on a new property?  Is this typical, and what can I expect?  And do I stand a realistic chance of doing this with a trad lender (community bank) given my newbie credit history?   Credit: ~760 FICO, but used some tricks to get there (Authorized User on parent's established credit line).  I have 3 loans on 3 units with the same community bank (but I only want to use one in this transaction).

Thanks for your help, Lance

@Steve Rozenberg: by "rehab" I mean a 2bed conversion to a 3bed (adding an extension, an extra bedroom).

@J Scott: sounds like a lot of stress if doing it remotely, especially as I wouldn't be able to just hop on a plane to correct any problems (not at 3k per trip anyway).  how often do you typically need to visit the site in person for remote rehabs?

Hi all, just wondering if I could get some insight from those that have gone before.

I bought a rental 4 years ago, payments amortized over 30 years but the lender would only give me a 5 year term (I think they have the choice to either call the loan due or renew it for another 5 year term at whatever the going rate is at the time).  So I have one more year left.

I want buy another property but I don't have enough spare cash (which is approx 10k) to cover the full acquisition costs .  But there's about 42k in equity in the rental (bought it for 100k with 30% down, it's appreciated at 3% for 4 years, so is now worth 112k which agrees with recent tax assessors appraisal).

So I have 52k (10k+42k) to work with. If my credit is good enough to secure 20% down (80% LTV), 22.4k (112k*.2) secures the existing rental, meaning I have 29.6k (52k-22.4k) left over to play with. At 20% down, this means I could buy a 148k house.

[I don't know if it's relevant to my questions (see below) but I also own two other rentals, loans held by the same bank as the first, one at 20% down and the other at 25% down.]

Now for my questions:

1. is the math right, or am I overlooking some fundamental lending practice?
2. is it possible to combine a refi with a new loan for a new house?
3. (the tricky one) will a 740-780 range FICO score secure 20% down?  (credit summary: 2 accts; #1 is authorized user [AU] acct, 12 yrs old, 35k line, $4k balance; #2 is new credit acct, 2 mos old, 8k line, $0 balance)

If after reading #3 you think I'm building credit up from scratch in the US, you'd be right: got my dad to add me as AU to his 35k acct, then opened one of my own (the 8k line), and may open a third here in a month or so (AMEX transfer from Australia).  May even get dad to add me to another one of his mature lines to boost my AAoA.  I'm just not sure if the bank will see through the AU trick.

Any and all advice, comments, observations, tips, warnings, etc welcome!

Thanks, Lance

Ha ha!  Are you the J Scott who wrote the "Book on Estimating Rehab Costs"?  I just ordered your book a few days ago :)

Unfortunately I have to do my investing remotely: Australia where I currently live is just too expensive for me... until I have more experience and cash that is.  So for now I invest in my home town in Texas, since I know that area well (and I go back there once a year or so).  I've only bought move-in-ready until now, but would like to try boosting my equity through rehabs.  Do rehab managers even exist?