Buying With HELOC And Refinancing To Cashout Immediately
Hi All,
am looking at a investment property that costs about 40k in Baltimore maryland. My plan was to use my equityline to buy the property and refinance within a month and repeat this process. If the home cost just 40K. Will it be easy to get all the 40K out? I want to use this as a rental unit.
Heard alot about seasoning, what is this and will it affect my plan.
Are their any laws or bad situations I should be aware of.
Thanks
Ciroma
Ciroma,
I too invest primarily in Baltimore. Seasoning means you will need to hold the property for a minimum of 3 to 6 months before refinancing or selling. But, it depends on the lender. Whether or not you get the 40K out or not will depend on the fair market value? Also, you must also understand that while Baltimore is a great place to invest, lenders are skiddish about it.
Hi ,
Lenders are skiddish about it. This one is troubling. Why are lenders skiddish?
What if the property is rented already. Will it still be difficult to cash out.
Are their particular lenders you will recommend I talk to when buying in baltimore.
Which areas will you advice one invest in and what price ranges. Currently looking at 40-50K. what do you think. Or going rehab will be a better option.
thanks
I typically buy and rehab. That way I start with a Hard Money Lender. It is expensive, but it works. Lenders are skiddish because they have been burned with illegal flipping scams, and other really stupid things the less ethical of our brethren do. Many will still do them, but you have to search a little harder. Also, the higher the value of the property, the better it is as far as working with lenders. Of course that flies in the face of what you are trying to accomplish.
I am currently re-evaluating my mortgage lenders.[ Edited by bnorton on Date 09/09/2004 ]
Also, I just looked at your other post about Baltimore Landlords. With regard to the areas, Baltimore is very unique in that it changes block by block not neighborhood by neighborhood. I once owned a property on a bread and butter block. The next block down was a war zone. The people in the war zone didn't bother the people in the bread and butter zone, and vice versa. My point here is with regard to valuations. The comps for the war zone were higher than they should be because the bread and butter zone was literally a block away. Be sure to verify your comps.
So will you recommend Rehabbing instead of having rentals in baltimore?
Plus am new at all of this and just want advice whether to actually pursue this or just sit tight on my savings..
Alternatively, how can one begin to invest in baltimore. Am sure alot people like you are doing this and have been successful at it.
Washington Mutual will let you refi 75% of the appraised value the day after closing (they have no seasoning requirements). But, obviously at 75% you must have gotten a good deal or you are willing to have some money out of your pocket.
Brenda
Ciroma,
JeffreyAdam has the best plan for you. We call it getting paid to learn. I am in the process of buying 10 rentals in Baltimore. Your acquisition and exit strategies have to be based on your needs, the needs of your sellers and buyers, and the property itself. I successfully wholesale, rehab, rent, and lease option in the city.