HML for property intended for keeping

Hello all. I’m a newbie with the drive to begin wholesaling properties. Thanks to the forums I am pretty clear with the process and direction I need. My purpose is to build investment capital by first flipping the properties. In this process I hope to find a property to keep for my growing family(2 kids, smile) which is where I have a question.

Can a HML be used for a property you wish to keep? assuming the purchase price/ARV margin is capable of absorbing repairs, closing costs, etc. when you refinance after repairs… ???

The only difficulty with this strategy is that you may not be able to use FHA loan programs or any lender with a seasoning requirement. Any mortgage broker should still be able to help you out with financing on the back-end.

I wouldn’t do an HML on it, only because they are meant to be really short term like a year or less, which won’t give you much time to refi. But if you are actually talking about keeping the HML on it without doing a refi that is a def. no, it’s not possible. Now getting money from a private lender is diffrent. As always I recommend, overborrowing, so you can get enough cash back at close to repair, and put some in your pocket, negotiate a 3 year no payment ballon, with an attractive interest rate, and it’s all good. Work on it, and sit on it for a while, not too lonf then do a refi. Ohh I think DiTech doesn’t have a seasoning req for a refi, just in case you still ant to do the HML with a quick refit which I still don’t recommend. :wink:

I was under the impression you can’t “pocket” extra money at closing from a HML. Is this incorrect?

You can pocket depending on the lender. Some make you do a draw for repairs and some, will let you just cash out as long as it meets whatever their LTV req is. You have to search for them but they are here. While I am typing this I would like to make clear that all money that isn’t financed by a bank is hard money. When most use the term HML, they mean a private investment GROUP. But another type og HML is a private lender, or angel investor. When you want to cash out big at close, I would use a private investor instead of an HML. But as I said HML groups allow cash out too, you just have to search.

Im very new at this and I think I found a good deal but I’d like to keep this one myself. Any opininons on not keeping my very first deal.

worldcl2002, do you mean keep for cash flow, or keep to live in? I would say examine it carefully if you want to live there, because I think we all get that feeling about many properties that we come across. I am in that situation no, with two properties and truth be told I will most likely wholesale them both. It is very tempting when you get the right numbers in a great neighborhood, but be sure that you already have the cash flow to take care of that note. I think one thing that we sometimes forgert in this business is that each property should be looked at that way first because for most of us this is our lively hood, and you can’t keep every diamond for yourself.