All Forum Posts by: Mario Balistreri

This is a two part question related to using a HELOC to replace my mortgage on a current investment property that I own. The property is in Columbia, SC and I was advised by my financial advisor to look into a HELOC to replace my mortgage on this property. The strategy is to apply all income to the HELOC use a credit card with rewards to pay for expenses, then use the HELOC to payoff the credit card monthly. Because interest is calculated daily I can build equity quickly using this process (I have pretty good personal cash flow).

Questions:

1. Does anyone have experience using this strategy and what did you like and not like about it? 

2. I'm struggling finding a lender in our current economic environment that will provide this service. Most of the banks that I have talked with (small and large) stated that they stopped offering HELOC's on investment properties. Does anyone know of a lender in the Columbia, SC area that is offering this solution? I am very low risk from a lending perspective.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $275,500
Cash invested: $25,000

I'm considering this house as my first real estate investment. My family and I purchased this single family home foreclosure and saw the potential for a large profit with some basic upgrades to kitchen, floors and bath. Our original plan was not necessarily to rehab it, then sell, but to stay there for awhile and raise our family. I started learning about real estate investing a few years ago shortly after buying the house, and thought "oh were doing that".

What made you interested in investing in this type of deal?

I was looking for a property that we could get significantly under market value and could rehab during our stay.

How did you find this deal and how did you negotiate it?

I used a realtor to help locate the deal and with the negotiations. There wasn't a ton of wiggle room in the negotiations due to it being a foreclosure and in a high demand market. All said and done, I feel fortunate to have found such a great deal, even with out the rehab we would have been able to turnaround and sell for a profit. But we used as our primary residence for a few years.

How did you finance this deal?

Traditional 30 year loan with 20% down.

How did you add value to the deal?

Rehabs included:
Backyard wood fence.
New kitchen with cabinets and quartz island.
Hardwood floors throughout the first level.
New carpet.
New fireplace
Kitchen back splash

What was the outcome?

We are listing the property this spring with an asking price of 375,000.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $275,500
Cash invested: $25,000

I'm considering this house as my first real estate investment. My family and I purchased this single family home pre-foreclosure and saw the potential for a large profit with some basic upgrades to kitchen, floors and bath. Our goal was to rehab the house while living in it for about 2 years. We did a lot of the work our selves and sub-contracted the pieces major pieces out. Doing so saved us substantial in rehab costs. All in with new kitchen, hardwood floors throughout the first level, a new fireplace, backyard fence, and new carpeting upstairs are rehab costs were around 25k. Though this took a bit longer than originally planned, we are finally done with all of our renovations and are listing the property in March at an asking price of 375,00.

What made you interested in investing in this type of deal?

I was looking for a property that we could get significantly under market value and could rehab during our stay.

How did you find this deal and how did you negotiate it?

I used a realtor to help locate the deal and with the negotiations. There wasn't a ton of wiggle room in the negotiations due to it being a foreclosure and in a high demand market. All said and done, I feel fortunate to have found such a great deal, even with out the rehab we would have been able to turnaround and sell for a profit. But we used as our primary residence for a few years.

How did you finance this deal?

Traditional 30 year loan with 20% down.

How did you add value to the deal?

Rehabs included:
Backyard wood fence.
New kitchen with cabinets and quartz island.
Hardwood floors throughout the first level.
New carpet.
New fireplace
Kitchen back splash

What was the outcome?

We are listing the property this spring with an asking price of 375,000.