Hi, I have a couple of properties that I purchased last year and I wanted to know how of if I could receive funds based on my current properties in the form of 2nd Mortgage, improvement loan, line of credit, etc. I like to use that money to purchase another property. Also, let me know the pros and cons in doing this type of technique.
Thanks,
PR
Depends on if you’re trying to hold the 2nd property or rehab. A lot of my investors take out HELOCs or equity from one home to be able to purchase a rehab with cash. Cash is king, so it really helps with being able to grab the good deals. The key is to be able to turn the property around quickly so you can have that line available again.
I plan on doing the same once my East Austin properties appreciate to the level that I need them to.
My Plan? Take the apreciation from prop. "A"in the form of heloc without exceeding your + cashflow(even if I bring it close to breakeven) level If the property is in a good appreciating area ( 10%+/year) Use that CASH to buy ,Fix, at discount 60%or better to ARV hopefully you are still less than 70% LTV .Refi your money (and maybe a penny or two more)back out and rent home hopefully for + cashflow .Take that Origional amount you heloc’ed and DO IT AGAIN ;D and again ;Dand again ;D