All Forum Posts by: Heath Thomas Jr

@Mason Field, @Ashish Acharya has it right. If you plan on making it your primary residence, I would focus on one of the renovation loans as that will get you the best pricing. Make sure to check you local zoning to ensure you can even build an ADU though.

Reach out if you have any questions on these products as they are one of my areas of expertise.

@Kyle Westerman I can offer a VA renovation loan. My email is [email protected]

Welcome @Craig Rosenfeld! Also local to the DMV and would love to connect.

Echo everything Jonathan said. With that being said, I am a local lender in Baltimore so have some vetted contractors I could introduce you to if the renovation route is something you want to look into. 

@Kevin Sobilo had some good comments but a couple other things to think about.

A cashout refi doesn't make sense because you would need to go conventional and the rate would be higher.

A HELOC is possible but since it is an investment property, not every lender will have an option AND even with a $100k HELOC at 10%, you're looking at $833 in interest payments, taking your cash flow negative.

I think your best options are either selling for the reasons Kevin mentioned or using your current cash on hand.

Sounds like that may be a bank specific product and a pretty sweet one at that. Fannie Homestyle requires 25% down and is only for 1 unit investment properties. That is the only other similar product most banks would be offering.

@Renee Stark everyone here as provided some good advice but if you are committed to investing in the Augusta market, I would recommend looking into lenders that can provide renovation financing. 

1. They should have a list of vetted contractors you can reach out to

2. You should not rely on them to fully replace you for oversight on the project, but they will work directly with the contractor on payment and ensure targets are being hit before money is released to them

3. You can roll the cost of renovation into the loan (less money out of pocket on the front end) and not need to refinance once the project is complete

Have you tried working with a recruiter to fill the role? Would need more info on the IT company but I agree with Travis you probably shouldn't give that up. At the very least, could you find some part-time help to free up some of your time? Get a GC and tag along on the renovation. Just because you have done it yourself before doesn't mean you necessarily are doing it in the most efficient/cost-effective way.

At the end of the day, building wealth through real estate like you are thinking might be the best move, but you shouldn't just drop things that are working now for something potentially better. Figure out a way to do both before determining which way you want to go.

If it is currently in your name, you could also consider a Homestyle renovation loan. Not every lender offers it, but you can do an investment property reno loan and roll the renovation costs into the mortgage. Depending on your state you could then possibly do a quitclaim deed into the LLC.

Why do you need to refinance the second property? Does it need work done? 

You are already losing money on it so you should either cut your losses and sell or be comfortable losing money on a monthly basis with the expectation to make it up on the sale down the road (see you're in FL so you might need to wait a few years). If you hold, I don't see why you would want to refinance and end up losing more money each month. Buy your next primary home conventional and it won't matter that you have an FHA mortgage.