I have my eye on a Fannie Mae property listed at 40k and just made a cash offer for 35k today. Fingers crossed that I get it because it’s easily worth 90-100 with a little paint and minor touch ups. The plan is to rent it for at least 1 year to avoid the tax hit if I were to just flip it. Plus, the rents here are pulling 800ish on this type of place.
The question, Im using cash and thought about doi a refi or Heloc to get some liquidity if something else comes up that interests me…plus rates are ridiculous right now. Is this usually doable or should I just focus on recouping the cash on a monthly basis via rents?
You can finance based on the amount you paid for it fairly quickly, but not based on the value,so 75% of the $35k you paid for it you can get, but its hard to find someone that will finance an amount that low.
Because many of the cost involved in loans are the same if the loan is for $35k or $200k, the cost become too high a percentage of the loan, and it gets into predatory lending,some banks will still do it, but most won’t deal with a loan under $50k
You can refinance at its TRUE value if you can show that you did the work to make it worth more than the purchase price. Usually a local bank will be more wiling to do that, but their fees will be much higher than a national or regional bank.