All Forum Posts by: Patrick Roberts

With good credit and low LTV (less than 70%), you should be in the 6s on a primary cashout refi 30yr FRM.

Cashout refi over heloc. You'll get much better terms than with a heloc and you wont have the risk of the line being converted. 

Are you attending Red Stick REI? That's by far the best place to start. That should be paired with self-education. There are tons of books, podcasts, and youtube videos that can provide you with knowledge and context/information for free or for very low cost.

Have you given any thought to strategy or focus?

Get a home equity loan/heloc and use it to pay off the credit card balances, then pay it down as quickly as possible. The interest rate on the loan should be much lower than what youre paying on your cards. Also, determine how you got into credit card debt in the first place and make sure a plan is in place to prevent this from happening again. Otherwise, in a year or two you'll find yourself with both heloc debt and credit card debt. 

Your first priority for investing should be getting the credit scores over 720. For any kind of investment property loans (Conv, DSCR, whatever), scores below 700 are going to make things expensive for you.

At the same time, start attending local REI meetups and networking groups. You'll learn a ton from other, more experienced investors, as well as make some solid connections to help land deals.

I'd be cautious about drawing on the heloc for investing, other than using it to fund to incidental investment expenses or small EMD amounts. Given that yall have credit card debt, it doesnt sound like there is a ton of capacity to recover from a major loss. Save up some cash and use private lending for any flips/rehabs. Keep the undrawn heloc for emergency liquidity. If yall have large 401k/retirement account balances, private lending could be an option for you as well.

DSCR loans for investment properties. For a new primary home purchase, youre probably stuck until you have at least 12 months of self employment unless you go back to a salaried W2 job. Once you have 12 months of SE and good income, bank statement/1099 loans may be an option.

I would seriously rethink this purchase. If youre already having problems now, just wait until youre six months in and the HOA is trying to lien your unit for every little infraction they can in an attempt to force you out. It sounds like this HOA is very mismanaged and run by karens who are treating the project as their own private kingdom (this is very common). There is 0 reason for them not have a budget and a system of financial accountability when they are managing other people's money. Your comments about the disrepair of the common areas that are the duty of the HOA point to mismanagement as well.

I deal with HOA purchases frequently, and in my experience, when you get pushback on required items like insurance, reserves, budget, etc, it's because these items dont exist/are not in order. What I also see frequently is this mismanagement leads to major issues down the road with insolvency of the project and/or massive increases in HOA fees and special assessments to cover years of neglect and deferred maintenance. All of these eventually lead to devaluation of the property.

Check with local credit unions about any portfolio programs they may have right now. Normally, I wouldnt recommend a credit union because they typically have horrific lending infrastructure and take 6-8 weeks to close a loan, but it sounds like you have the luxury of time since you already own the property. If youre under the gun and need to close quickly, work with a specialist lender or mortgage broker to refi into a Conventiona loan. 

I probably wouldnt look at FHA unless you have very high DTI or bad credit. FHA loans are govt subprime and are very expensive for prime borrowers.

If you just want to exit the heloc, then a refinance will convert it into an amortizing loan to pay it down over the term of the new loan. A cashout refi would only help if you were getting the cash from another property's equity. Any refinance loan involving the property the heloc is currently on will roll the heloc balance into the new loan. 

What happened to the funds that were drawn from the heloc? 

Also, there's another thread on here about a bill that was just passed in California that is likely to impact helocs and other junior liens. I would immediately get a plan in place in case your Heloc gets called in the next few weeks. 

 Grifters gonna grift. 

For delayed financing, the new loan will be treated just like a purchase money mortgage. The funds for closing that are listed on the settlement statement will be sourced. Based on what you described, this transaction will not qualify for delayed financing. The lender will require sourcing on the payment from your parents, and neither a gift nor a loan from your parents will be allowable. 

Another tidbit - this will vary between a Conventional loan vs a DSCR loan.

Lastly, what are you trying to accomplish here? You're putting 20% down at purchase, so why not just get a purchase money mortgage at the first closing?