All Forum Posts by: Jon Panuska

I should clarify a little as to what I just did for primary, rentals, etc. 

I purchased my primary well below market, rehabed (in this case total year down), refinanced / cashout at new appraisal and used the cash to purchase more rentals. I am still living in the primary as it has high forced appreciation. 

The down side is I need to be very careful of the rental cash flow as everything is leveraged.

As far as seasoning goes for the rental, I have heard 3 to 6 months from various banks. I did find a local credit union who only wants a signed lease and security deposit.

How hard it is to get either loan depends on many factors. If you have the downpayment for your primary, can you purchase a distressed propertyfor you primary, save some of the cash downpayment to rehab then refi to get cash for rental?

I just finished the process on my primary and it worked very well.

Try talking to some smaller banks and credit unions, usually they can get a little more creative  if you look like an acceptable risk. 

I am looking for the most effective way to use a HELOC and or cash to finance rental properties. I currently am not buying as the market in our area seems overpriced. (Usual for August and September )

I have a HELOC for $300,000. The bank had me transfer the current mortgage to the HELOC which is $119,000. I am good with the transfer as the rate is lower and no closing etc.

I currently have the cash to pay off the HELOC and avoid all interest, but that does not leave much available cash left.

My plan is to purchase a few properties in November or December. I will end up at 25 to 30k down per property.

So is it a good idea to keep the cash for downpayments, or pay the HELOC off now and use the HELOC when I am ready to purchase?

As a side note, I am self employed with a business that makes 80 to 90k a year and I have a few rentals which each cashflow about $550 per month all currently under lease.

I have found a couple of inspectors and an appraiser who will work quick, usually just a few days.

The purchase I am looking at is from another investor. He is into flipping, I hate rehabs and want long term rentals so it might be a very good match for both of us. 

My concern is that nothing gets missed in the multiple closings, title transfers etc.

I have had issues before when a seller inherited a property then could not get everyone on the title together to sign off. Quick cash sale ended up taking 8 months.

I have purchased a few rental properties with conventional financing and I have secured the means to start offering all cash deals.

Are there any pitfalls to a quick close, all cash purchase? I am mostly concerned about legal things like sellers payoff of their loan, title work etc.

Thanks in advance.

Just remember a good deal is a good deal and a bad deal is a bad deal even if you try to polish it up to look good.

Set the money free, you'll be suppressed how quick more will take its place.

I just did a HELOC with First National Bank. Never delt with them before. It's an adjustable rate with 1.99% the first 6 months then prime -1, currently 3.99%.

They were pretty good to deal with, although I have 830 credit and lots of equity in the house.

They had some issues with DTI as I am self employed with multiple businesses and an investor so no money on paper.

 They initially came in with less than I wanted but some how worked another $50,000 into it when I was going to walk.

Make sure you talk to a good accountant. Depending on how you pull the money out there could be fees and penalties that remove a large portion of the cash on the 401k.

My brother pulled money from a 401k to start his equipment rental business. It worked for him but his cash on cash return was really high as he worked in the business 100 hrs a week for the first few years. He has since put the money back and changed the business from incorporated to an LLC due to the taxes.

I am not quite sure what you mean by "half cement" wall but if it is supporting the house, you need an engineer.

If the engineer is going to inspect it, give code compliant advice on how to repair, and have it stamped I think $475 is fair.

As a side note, an engineers recommendation will probably be much more involved than what a home improvement contractor may say. Nothing against contractors but that has been my experience. 

Have you thought about Deleware? Woods, ocean, lakes, etc.

Land costs can be very low.

For investments there are many developer opportunities, beach rentals, Baltimore, Philly, New Jersey are not that far. 

Retirement taxes are favorable also.