Need Advice With Financing
Hello, I need some advice with acquiring more rental properties or possibly rehabbing some homes. I do not qualify for any more loans because my debt to income wont allow me. I have great credit and about $275,000 in equity spread out in 4 properties. What would be the best, least expensive way to approach this. Would refinancing be a good idea. Home equity lines of credit or home equity loans. I am really stuck and I dont know what to do. How can I keep increasing my rental property portfolio and generate more money to do other projects such as rehabbing. Thanks again
Hey there! Congrats on the properties you've already acquired. You've got some great equity. I would hold on to that equity. Dig around on this site to see the creative ways folks are getting financing without a formal "loan."
You could acquire properties through seller financing (Many sellers would rather have a steady monthly income over a lump sum. Others are just desperate to sell.); hard money (private investors); lease options; or contract for deeds/land contracts. I'm sure others would recommend subject to. I'm still learning about this strategy, but it basically is using the financing that's already in place for the property. (Sub to experts please correct me if I'm wrong.)
That's my two cents. Good luck!
Amelia
Thanks for the reply. I will look around
Keep in mind that if you have a rental property that brings in $1000 a year, they will consider $750 of that as your income, which in turn offsets your ratios. Make sure they "add" that to your income as you are shopping for loans. HELOC's are a fantastic way to go. They only bear interest when you borrow from them, they are generally inexpensive loans (in terms of points and closing costs), and they generally have the best interest rates. Refinancing the other NOO properties may be more expensive, but it's obviously a route you could explore. You should be able to borrow around $220K from your current properties (80% LTV) and you could use that for a 20% down payment on a million dollar property or to dump into your next rehab project.
You're in a great position to move forward. You need to start talking to lenders and tell them your position, situation, and what you are trying to do. They'll be able to give you specific info.
You can also learn the "no money down" techniques and buy and hold using those. You've got everything going for you, you just need to decide what you want and do it.
Thats some great advice Hibby, what exactly are HELOC and NOO. What is typically done in my situation. As of now, I have everything under my SSN and I am quite certain that I do not qualify for a conventional loan. What do experienced investors do in my situation. The next property I purchase would be my first in terms of using a real investment strategy.
HELOC= Home Equity Line Of Credit
NOO= Non Owner Occupied
Get different rates for NOO as oppossed to Owner Occupied.
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If you have income property with equity and great credit I can pull some money for you. My contact info is under my profile.