All Forum Posts by: Kelsey T.

@Julie J. definitely!

Hi @Julie J. this is a great question, and something I have wondered about as well. 

We were looking into some creative financing at the beginning of the year and at that time were considering using a HELOC on another mortgage as a down payment. This might be something for you to consider.

@Patricia Steiner thank you for the reply! Yes, we have been in talks with the county and are working with the right people to get the job done. We have over 9 months of research into this project and we definitely understand the complexities. That answers my question, thank you! We just want to have all our ducks in a row so that we can get moving ASAP once it gets completed, and I like to educate myself as much as possible before getting into talks with lenders. 

@Steve Morris thanks for responding! We understand this and have been working on that part for the better part of a year now. 

Looking at a property with plans to split it into two pieces. If we do this, and plan to develop one, how does that affect appraised value? 

We would obviously purchase initial piece with 1 loan, but then may sell one of the resulting lots.

Congrats @Stephen Keighery, and thanks for sharing your insights from your journey!

Hi @Dean S., 

I'm almost always going to vote for paying off debt. It simplifies everything and if it's cc debt, likely the interest rate is high. If you have good payment history, you can request credit limit increases from your cc company, and that will also decrease your credit utilization. 

@Nitit, If you plan to live in one of the rooms, I would analyze the deal to take into account the difference in what you are paying for rent currently, vs the portion of the mortgage you would be paying if you lived in the house with roommates. If you are paying $1500/mo rent now, but would only have to cover $500 of the mortgage if you lived in the house, that should be taken into account. 

To answer your question, I would definitely consider buying a breakeven house in SoCal. Especially if you were able to buy a deal in which you immediately gain equity or if it's a great location so you can be confident in the appreciation. California appreciation is pretty impressive. Just be sure that you have a lot of cushion to cover your costs, even if you lost your job or something big and unexpected happened. 

@Brandi Croom @Chris Hutchens Did either of you ever pursue this further? Currently looking at a house without a foundation as well!

@Lee Bell it's great to hear it straight from an appraiser, thank you! I have been wondering for my own knowledge- when determining comps, is it more beneficial to look at similar square footage or similar number of bed/baths? 

Hi Yolanda, 

I would agree with what has been said. Take a look at your current credit score and figure out what it takes to improve it. You should be able to sign up for a program like credit karma and get an idea of what it is and what is bringing it down. Are you using too much of your total credit? Pay some down and ask for increases in credit limits. Credit history too short? You can only wait, but DON'T CLOSE ANY OLD ACCOUNTS! My very first credit card closed because I never used it and it dropped my score because I waited 4 years before I got a second card. Too many hard checks on your record? Wait before applying for any loans or opening new accounts. One of the worst things you can do is miss payments, so organization is key. When I added my husband on to one of my credit cards it improved his credit utilization (he was using like 60% of his limit, so putting him on another high limit card helped) and his score shot up. The same thing can be done if somebody you know or trust has an account in good standing that has been established for a long time- it increases the average age of your accounts. That last tip I would say should only be used with spouses, parents, and some business partners. In my case, I had too few accounts open, so getting a new credit card actually helped my score!

Additionally, having some cash saved to get started is so important! We have had lots of unforseen expenses pop up with our rentals, so I would definitely recommend taking some time to save up money. 

I would also look for some creative deals. Try to seek out seller financing- we haven't been able to use this yet, but we almost did on our last deal! Also look around for different lenders. We have used big banks on ours and man have my eyes been opened to some much better options that are out there. We are definitely going another way next time. 

Best of luck!