All Forum Posts by: Tyler Buck

As an update for anyone else, I did reach out to PenFed and they stated that they stopped doing HELOCs (and he made it seem like all lending) on rental properties. They stopped somewhere around 3 months ago.

Thanks Kevin! I'll take a look since I'm right at 4 properties

(Cross posted as I posted it originally under the creative financing section)

I have a previously occupied SFH that is with a 2.75% VA loan. I've had it rented out for about 4 years now and it's sitting around 180k remaining with a market value of 330k-340k.

I'm finishing up another renovated townhouse in the area and that one went up from 1200 to 1650 monthly rent and it garnered about 75 inquiries in 12 hours. So there's a seriously hot market for rentals in my area. I have a few in mind that would be worthwhile to acquire and rent out with minimum alterations. I'll have to leverage some capital from the above to make those work.

I really don't have any appetite to refinance a 2.75% with a 6%+ rate to leverage the equity. I used an LOC on my primary to close on a duplex this year, so I can't touch that for now. I think a LOC would be the best option on this other SFH, but I haven't found too many lenders that could accommodate a LOC on a rented property.

Any ideas or other suggestions?

(POST TITLE SHOULD BE THAT THIS IS A RENTED SFH)

I have a previously occupied SFH that is with a 2.75% VA loan. I've had it rented out for about 4 years now and it's sitting around 180k remaining with a market value of 330k-340k.

I'm finishing up another renovated townhouse in the area and that one went up from 1200 to 1650 monthly rent and it garnered about 75 inquiries in 12 hours. So there's a seriously hot market for rentals in my area. I have a few in mind that would be worthwhile to acquire and rent out with minimum alterations. I'll have to leverage some capital from the above to make those work.

I really don't have any appetite to refinance a 2.75% with a 6%+ rate to leverage the equity. I used an LOC on my primary to close on a duplex this year, so I can't touch that for now. I think a LOC would be the best option on this other SFH, but I haven't found too many lenders that could accommodate that.

Any ideas or other suggestions?

Appreciate the insight thus far. Zoning is one of my first stops as it's listed as being within R-3 and the ordinances don't define what use is covered for R-3. It's currently defined as a CX zone due to the existing school designation. 

An architect is my next step after zoning, but I'd hate to spend money on plans to find out I can't fund the work. Any insights there? Do I need finalized architecture plans before trying to acquire commercial loans? Again, completely out of my element here, so any advise is appreciated.

The school is multiple stories with multiple parking lots on the parcel. I don't think I'll have any issues from a plumbing perspective unless I try to put units on the slabbed basement level or the existing gymnasium. I considered looking at mixed use for those spaces to help improve the versatility of the building. Storage was my first though, but I think that would not do well in the area as it's developed, but most lots are 1/4-1/2 acre in size. The Gym does have a walk-out area, so it could be a completely different commercial space. I guess these are probably better discussions for an architect.

I own a few SFH and closing on 1 duplex. I came across an opportunity for a school that I think would be a really great setup for apartments. I'm a bit out of my element when it comes to estimating costs and possible expenses on a building this size. I figure I could easily convert each room (10-15) into an apartment, but that leaves about 50% of the sqft not utilized. From an expense perspective, I ballpark this as somewhere from 400k-1 mil, but I'm not that cash rich. I can, however, purchase the existing property with a conventional loan. So I have a few questions here...

What is the best way to tackle a conversion like this from a finance side? Bank, HML, something else? (private equity is not available - tried in the past)

Should an apartment building be structured within an LLC or S-Corp? (Nothing held like that today)

Are there good ways to estimate these conversions? (I'm guessing a GC is the best resource)

Since I'm left over with about 50% of the sqft, I figure I could upsell and add a small gym. Any considerations there?

Finally, with so much space left over, could I try to have storage space for rent within the basement level or is that an issue for residences above those spaces? 

I appreciate any insight that you can share.