All Forum Posts by: Kevin Yeats

 First, I think you mean EQUITY line of credit.

I personally think it adds to your risk.  IF your flip does not work out like you plan, if you run into unforeseen problems (see Occupants from Hell thread), if the rehab takes longer or if it does not sell or your market sees a steep decline in value the you get hit twice.

First your investment property does not pay off as planned and second your LOC lender keeps calling and asking for additional or larger payments ... or worse, forecloses on your personal residence to make good on the LOC at a time when the value of your residence and your investment property are low (underwater).

If lenders require additional equity in your investment property, look for another lender that will make a higher LTV loan OR look for someone who will partner with you on your investment property.

Good Luck

Try Leslie Purdy ... a Realtor in Melbourne

Shawna, I agree with Paul.  I don't understand your situation and your question.

... BUT  ...

You have come to a great place to learn about real estate investing.  Keep reading and ask more questions.  There are a ton of nice, helpful people who have been where you are now.  Ask.

Ryan, your sale and lease back transaction sounds like a good plan but be aware of any family members other than the daughter who come out of the woodwork after the owner's death and claim some ownership interest in this property.

NOTE: NO LEGAL ADVICE.

Jacob, I also welcome you to Bigger Pockets  where you can get a full education in all things real estate.

The bad news is that you have to spend some time and read, read some more and then read some more.  Spend the weekend reading about rental real estate.  Look at your deal again, crunch the numbers again and determine what happens if you vacancy is 20% instead of 7% (seems low) or if the interest rate you get is 1% or 2% higher.  Think about your exit strategy.  Think about the big items that can be expensive like Steve Smith mentioned.  Assuming the property is in Maine, what about snow plowing and lawn mowing?

There are many very nice and helpful people on this website who have been there, done that and learned from their mistakes.  You too can learn from their mistakes and not make them yourself.  Ask away just like you did in this post.

Good Luck

Read Eric Drenkhahn's blog No Nonsense Landlord and also his posts here on BP

As Chris mentioned, it helps to know the purpose of your loan request.

For investment properties, you could get a stated income loan (hint, hint) that does not require that you state your income.

Chris, There are two reasons why this is difficult to answer.

First, do the other financing terms (interest rate, term, etc) change with the greater downpayment?  Many lenders would offer a lower interest rate with a greater downpayment (the owner has more skin in the game).  The lender may require mortgage insurance on loan with lower downpayments.

Second, aside from lender requirements, financing structure has a large degree of preference involved.  One investor may want to make sure everything goes right with the investment property and sleeps better at night knowing that if property values dip, the bank (lender) will not be calling at all hours requesting another payment.  Other investors want to use OPM (Other People's Money aka leverage) as much as possible under the belief that when the property value increases, the return on his/her small downpayment becomes that much larger.  Neither approach is right or wrong .... just preferences.

A third factor is the ease with which the investor can obtain additional funding should "the deal of a lifetime come across his/her desk."  In such circumstances having liquidity or easy credit will allow the investor to purchase the dream property .... but that deal may slip away if the investor cannot secure funding quickly.

My $0.02

From the pictures, this looks like a LOT of work for a (best of the worst case scenario) $38,000 gain.

I would keep looking.  This property will probably still be around in another month.

Anyone using Google+ for business?

Any success?  Reviews or other thoughts?