All Forum Posts by: James R.

@Amy Yarnall

I just closed on a HELOC through PenFed. They do up to 80% LTV on investment properties at prime plus one.

I just finished rehabbing a HUD home I purchased and would certainly do it again. HUD is a little slow but understanding the process helps make the slowness bearable.

My first bid was rejected outright, second bid was rejected but they did give me their minimum net to HUD, third bid was accepted. In this case minimum net to HUD was 85% of their asking price. Also, my agent had no issues getting info and working with the listing agent.

I agree with Chris, you really can't create an average to go by. I live in Winter Garden and within a few blocks of my house you could buy a 3/2 from $130k needing some TLC all the way up to $500k  but still a little dated. Even crossing the fence in my backyard adds $50k to the home prices because the community is gated. To many factors so you really need to look at comparable properties. 

@Ethan M.

Another option would be a HELOC. You can then have access to the money without paying the interest until you are using it. My most recent property was purchased cash a couple months ago and rehab is complete so we are going through PenFed for a HELOC. The plan is to then purchase another property, rehab, refi, pay off Heloc, repeat.

If you go the delayed financing route then be sure to know exactly what your lender will do and requires at initial purchase. Most of the lenders I've talked to have additional restrictions on top of the Fannie Mae requirements. A common one I've seen is to not allow delayed financing for the rehab costs even if it was on the HUD and paid out via escrow.

I wouldn't come right out with "I have an investment opportunity for you".

Being new, I'd talk up what I will be doing in RE then mention how expensive financing can be. At that point I'd really talk up how the private money lenders got it made. They take on minimal risk and are getting guaranteed 10% returns with no work. Anyone can do it so if you know someone with some cash and looking for a profitable and passive investment then give them my number. 

You should be able to gauge their interest at that point. Maybe they'll want more info or maybe they know someone. Have your numbers on standby in case they want to know more right away.

With some good negotiating you could probably get that chain thrown in on the deal. 

I spoke to a lender a few days ago that checked with her underwriter to confirm delayed financing uses the cash-out refinance rate and fee schedule. 

The quotes I received today are right around $250/month here in central Florida.

It'll come down to your personal finances and you should talk to a broker about your situation to determine what's feasible. 

Be sure to account for PMI when running your FHA numbers if you're only doing 3.5% down.

@Zoisa Marsden 

I agree with what everyone else has said about saving money and building a cushion. Jumping into a property without one can put you in over your head. 

If you are eager to get started investing and have been doing a ton of learning then why not find a deal or two that you can wholesale? This will get you well on your way to building that cushion as well as a down payment. You'll also be connecting with other investors and getting hands on experience.