All Forum Posts by: Ash Hegde

You are correct that you don't pay principal down with an interest only loan. You can gain equity though, if your property appreciates. Unless you take additional cash out, when you refinance your mortgage balance will be the same as what you started with 5 years prior (you don't have to take additional cash if the appraisal goes up). 

I can help on #4 - FHA has a great low down payment option if you need it. The down side is a permanent mortgage interest if you go really low with your down payment. Also, you can generally only have one FHA loan at a time so it's not great for repeat use (you'd have to refi out to use it again).

Mortgage brokers have more wiggle room than a traditional big bank but there are still limitations based on the market rates of the lenders they work with. They are usually going to be close in rate, but response times and loan processing times can be other important non-rate factors when choosing a broker. The cheapest rate won't help if delays mess up the closing date and cause additional costs (and sometimes lose a deal). 

If the numbers work with a cash-out refi and you want to grow your portfolio, do it. There's no telling when rates will come down and you can refi to more favorable terms if they do. 

If your goal is to expand, you find a good deal, and the numbers still work at the higher rate, go for it. This is a very long term game. There is no guarantee that the rates come down any time soon, and even if they do, you can refi again at that point. What you won't be able to do is turn the clock backwards and buy a property that you passed on while you waited. 

Bridge loans, like hard money loans, are meant to be short term financing for something like a BRRRR. You are correct that they are a higher rate and the goal is to refi out as soon as possible. Did you want to pay for your own rehab or does this loan not fund rehab expenses? That's the only part that seems a little off - the hard money lender we use will pay for rehab costs.

Welcome Eugene!

Agree, I think you'd be better off keeping those activities in separate LLCs. 

If you intend to live there you might get better financing with an FHA 203k rehab loan.

 Sorry, outgoing messages to you still not working for me. If you can DM me your email address I will try that way. 

@Joseph Eversman shoot me a text if you can, for some reason I'm having trouble with your DM. Thanks.