All Forum Posts by: Lis Faudale

@Andrew Syrios and @Hamp Lee III I know you both mentioned possibly moving to maximize an FHA or house hacking. I don't believe we'd be able to sell our current home until Feb of 2024 without having to pay taxes on the money we rolled into it from selling our home in FL....

The idea of investing in real estate was not on the table at the time or we probably wouldn't have even sold our house in FL, we most likely would have kept it and rented it... but we cant dwell on the "coulda-shoulda-woulda"

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Quote from @Reid Chauvin:

Hi @Lis Faudale - the property does not need to be a primary for you to be eligible for a construction loan on it. You should be able to obtain a construction loan from local bank in MD. You would then refinance the property upon completion of the construction, paying off the construction loan with a conventional 30 year fixed rate loan.

Another option is a renovation loan. It's slightly different from a construction loan as it's already a 30 year fixed rate loan, so you don't have to refinance at the end of it. There are advantages and disadvantages to both options. Both are going to require money down upfront, though the amounts may vary. One very important factor here will be partnering with a good contractor to help you estimate the costs of renovation and to steer the project through to completion.

Hi Reid! Thank you so much for responding. Could it just be that the lender I used for my personal home isn't aware of these types of loans? Our initial plan was to get a construction loan and refinance after the work was done.

I've never heard of a renovation loan. That would be interesting to look into.

Is this something where I just need to find a lender who is able to process these types of loans and maybe I'm just looking in the wrong place?

Thanks again!!! Lis

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Quote from @Andrew Postell:

@Lis Faudale are you familiar with the BRRRR Method? That second property seems like a candidate for it at least...do you know what the BRRRR Method is?

I am familiar with this method. Its a little daunting to think about, but this would be ideal with the second property. Again, we're just struggling to figure out how to finance it because I'm getting so many different answers from so many different people and we don't necessarily have a large amount of cash sitting around.

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Hello all!
Thanks for taking a minute to read and hopefully help.

My husband and I are trying to figure out a way we can finance a first time rental. We’ve found 2 or 3 that are definite options.
One is actually located in the town I went to college in and essentially guaranteed because of where it’s located in proximity to the college.
The other is a duplex, it’s gutted and the current owner started putting up drywall, but it seems like maybe they ran out of money or had some kind of emergency and couldn’t continue. The duplex could easily generate a cash flow 3 times the amount of any small mortgage on it.

We would prefer to purchase the second property and finish it because of the high potential for cash flow with 2 units in 1, but we don’t have the cash up front.

I went to the lender we used for our personal home when we moved back up to MD and he told me we’re not going to be able to get a construction loan if it’s not our primary residence and that the best bet with anything else is 20% down on a conventional loan.

I know there are other ways to do this. But I’m at a loss. Should we speak to other lenders? Did I misunderstand the books I read and the research I did?

what would you all suggest? Thanks again for the insight and the help!

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All Forum Posts by: Lis Faudale

Lis Faudale has started 1 posts and replied 4 times.

Post: Lending Solutions for a First Timer

Post: Lending Solutions for a First Timer

Post: Lending Solutions for a First Timer

Post: Lending Solutions for a First Timer