All Forum Posts by: John Herold

Maybe try Spring EQ for HELOC options on an investment property. I think they go to 85% CLTV.

Have you tried Spring EQ? I think they can go up to 85% CLTV for investment properties.

Might be tough to find, but the best way to find these lenders is to get a list of other recent value-add purchases in your target markets and then research which banks actually financed those deals.  Let me know if you'd like any help with this.  

Why not just go with a fix and flip loan?  If you have experience, you can get 80-90%+ of acquisition cost and 100% of renovations funded by a lender.

I would go with purchase financing because purchase terms are generally better than refinancing terms (with cash out refi terms even worse). Later on, if no PPP provisions, you could just pay down your apartment loan with your LOC assuming your LOC rate is lower than your apartment loan rate. Hope this helps!

Try NASB Financial or Solera Bank

Once it's rented out, I have 1 lender that could do this right away based on a fresh appraised value, BUT their minimum loan amount is $100k and their max LTV for a cash-out refi is 75%, meaning that it would need to appraise for $133,333.

However, you may not need that much $ to do your next quad or triplex if you owner-occupy it and go with a 96.5% LTV FHA loan.

If you haven't already done so, could you expand your HELOC line? Also 20% down and 5% in fees sounds a bit high for a fix and flip loan.

Alternatively and if you're ok with living in a 4-plex, you could owner-occupy 1 of the 4 units and look at qualifying for a 96.5% LTV FHA loan. You could renovate the other 3 units while living there, and maybe get the reno funded by loan funds as well.

A cash out refi would make a lot of sense. See what the lender prefers in terms of LLC versus keeping it in your own name. There are lenders out there with no waiting period, meaning you can refi right away. Yes, rates will be high, but you should still have positive cash flow (and even more if you go interest-only). Even more important, you would then have a chunk of cash for your next one. Instead of going all cash on the next deal, consider using a portion of the ~$80k in refi proceeds (gross), say $50k, to put as a down payment on a 75% LTV to 90% LTV fix & flip loan, increasing your buying power to a $200k to $500k purchase price. Of course consider the general risks of taking out debt (along with rehab risks), but if you are confident in your abilities and finding good deals, this could be a way to scale up quickly.

Consider a JV on a large m-family property with a high net worth investor or fund whereby you put down little to no money upfront but put yourself in a position to make a very large incentive or promote payment if the property sale results in a high return to the investor.