New Opportunities For A Newby
I just started investing (the old fashion way) and now own 3 homes. Total current worth is $1,150,000. Total owed is $783,643. The differnce being $366,357 in equity. The 3 loans (1 yrs old) are Option ARMs with a 3 year prepayment penalty
I have an opportunity to purchase 2 more homes with an asking price of $400,000 ea with renters and good cash flow in an exellent area. Got any ideas?
Greetings sotruth,
More details are really needed here, as a lot depends on your intentions with your existing properties, your intentions with the new properties, the motivations of the sellers, and your overall financial situation.
If you need working capital, the obvious thing is to pull equity out of your existing properties. But to avoid prepayment penalties, you may need to do it as a HELOC or 2nd TD. And as you may well know, a lot of lenders are reluctant to go second position behind a neg-am first. There are some that will do it though. Also, your existing lenders may be willing to re-write your loan(s) without penalty. But obviously, this would impact your cash-flow on these properties.
If you just plan to acquire them “the old fashion way,” there are lenders who will go 95%-100% on NOO loans -- some will even do it with stated income. But with that high of LTV your rates are going to be higher. This still might be a better way to go if the new properties’ cash-flow will support it.
These aren’t recommendations, just a couple of basic thoughts. Again, more details are really needed to come up with a creative solution or good potential approach.
If you can post a little more information, I’m sure people on this site will come up with all kinds of good ideas for you.
[ Edited by mcole on Date 10/03/2005 ]
Who does HELOCs on N/O/O?
WSB:
HELOC: Home Equity Line of Credit
N/O/O: Non Owner occupied
John
Okay just called a LOCAL bank and found out that it can be done. Problem Solved.