All Forum Posts by: Keith W.

To Lisa - The lien would be against the equity in my primary home. It’s not free and clear so it wouldn’t be first position. It’s the only property I have right now. 

As for the elaboration, I went through some financial struggles in my career (fossil fuel) a few years back and was forced to do a mortgage modification. Little did I know that part of the mod was to a silent second mortgage was placed on my home for the amount of the arrears plus penalties and fees. This all came up to 100k! 

I didn’t find this out until I tried to do a cash out refinance to secure investment real estate. This second was so silent, it took a lot of searching even from my own mortgagor to determine who was holding the second and how much was owed. 

Where I am with that now is, if I want to tap into any equity, I'd have to refinance to consolidate the second. Then do a HELOC to access the remaining available equity.

My bank says I have the numbers to do it but essentially I’d be adding another 140k to my current mortgage. 100K to satisfy the second and 40k to invest. 

I’ve only had one phone conversation with this lender. They didn’t mention needing to be in first position. 

My biggest fear is not failing the deal as I will take every conservation precaution as I learn the industry. I just want to be leary of someone trying to steal my home. 

Sounds good. Do you service the Massachusetts area? 

Recently, I came across a lender (not sure if Hard Money Company or Private Money) who will provide loans based on the equity you have on your current properties. 

The beauty of it is that you receive all the money at closing (acquisition + rehab). Therefore you don't have to pay to initiate construction then request withdrawals. 

Also, the closing fees and points can be rolled into the loan, meaning you don't have to come out of pocket at all to close a deal. 

If you're interested, I can elaborate on why I won't just use the equity in the home to make the purchase, but for now, my question is does this make sense? For some reason using my home as collateral seems a little scary to me but I don't want fear to make me freeze and not do anything. 

Any suggestions? 

Thanks for the confirmation. 

I have a Hard Money Lender willing to invest 100% for the project if it meets all the criteria. (Property + rehab) Great! The problem is, I have to pay for the work, then request disbursements as the work is completed.

So if the property needs a few thousand dollars in demolition for example. I have to cover that, then get reimbursed from the lender for that amount. To me, that's money out of pocket.

In my case, I may be able to get the initial funds, but I'm always hearing about folks in worse financial situations than me that worked with hard money lenders, etc.

Where should that initial money be coming from or are there some lenders that will provide the money upfront?

I have a Hard Money Lender willing to invest 100% for the project if it meets all the criteria. (Property + rehab) Great! The problem is, I have to pay for the work, then request disbursements as the work is completed. 

So if the property needs a few thousand dollars in demolition for example. I have to cover that, then get reimbursed from the lender for that amount. To me, that's money out of pocket. 

In my case, I may be able to get the initial funds, but I'm always hearing about folks in worse financial situations than me that worked with hard money lenders, etc. 

Where should that initial money be coming from or are there some lenders that will provide the money upfront?

Okay!!!! Got it. Maybe the Forum name (In this case, 'Starting Out') should be shown that it is a clickable link. It could be highlighted in blue and underlined or something. 

But thanks, that thing was filling my inbox to capacity!

Can you please provide information on how to unfollow a forum. According to the search, this has been a problem on this website for years and it seems like it should a very basic procedure. Could you please advise?

To make a long story short, I approached my bank to cashout or line of credit to finance the start-up of my real estate business. It was discovered that there was a soft-second or silent mortgage on my home. This was the result of a mortgage modification a few years ago when my industry was under attack by the previous administration. (Not to get too political)

Anyways, I was looking to pull 40K out of the equity from my home but there is a 100K soft second mortgage that must be satisfied before I can refinance or line of credit. If I were to sell the house, that 100K would become due. 

Therefore, in order for me to get 40K, I would have to refinance 140K. A hundred to cover the soft second and then 40k to use for the business. 

This, of course, will raise my monthly mortgage payment. My overall strategy is, to begin with fix and flips, using a portion of the profits to pay the mortgage back down. 

I guess my question is; does it make sense to refinance for 140k in order to get 40K in working capital?

Thanks for the feedback. I was concerned because I’ve heard stories of title companies getting it wrong. Figuring if they could miss, so could I.