Anybody in Texas, paying cash, rehabing, then getting a equity loan at the higher appraisal for the next project? If so , send me your lenders contact info.
Andrew.
do you mean equity loan such as in second mortgage heloc…or is a 1st mortgage (non heloc) ok?
you’ll need strong credit
documentatble income
plenty of reserves for all properties
ltvs 70% and under
:shocked
Why do you want to hold properties? Why not buy and sell? Take the cash and move in. If you don’t have the cash to buy the property cash why do you want to keep it. I am a believer in rental properties however you have to keep in mind that rentals only give a 5% return on investment. Right now with the market flat or I believe heading down more, why buy a long term property now? Turn and Burn. Get in, fix it up, make money and get on to the next deal
With prices cheap enough in many areas to buy cash flowing properties, why not buy a property now to hold long term?
wrirya - rentals only 5%???. my current deal is a REO - 1992 built , 3/1 residential, paid $28,500 cash. The place will easily rent for $400. Even with a planned $5000 in improvements the NET annual return is over 16%. Now if it appraises for a modest $40k, and I can get a 80% LTV loan @ 6.5 % the estimated NET return goes to 30% , and I’m getting just about all my cash back to do it again. I love the leverage.
My next planned offer is on a 3/2 x 2 (duplex) for about $42,000. 2 years ago they sold for $99k on that same street. Sure you can fix and quick flip now but your still selling against a bunch of REO’s. Aquiring rentals gives cash flow and a few years later, the REO’s should be at normal levels raising selling prices.
Residual income is the key to retiring. You can not flip homes forever. Eventually you will stop. I like to have 10, 20, 30 homes paid off free and clear with rental income. Finally the market is at a position where in major markets you can buy cashflowing homes.
I just picked up 4 condos, 2/1 in ft lauderdale fl for 14K each and will rent at 850 month Section 8, HOA/Taxes are $250 month. So thats 650 profit… I got tenants in place at closing. Condo been rehabbed so minor things will come up. In less than 3 yrs I can pay myself back the purchase price and enjoy the rental income.
Hi I’m eager to invest my hard earned on real estate in Santa Cruz. Can anyone tell, What’s the recent trends of equity loans in Santa Cruz Ca, for Capitola beach houses or Aptos real estate?? Wish your information will benefit us both.
Great comments. I agree that cash flow is the key to retirement, but you have to keep in mind the full cost of having rental properties
Repairs
Capital Repairs
Taxes
Insurance
Vacancy
Marketing
You also have to realize that there is a cost to manage the property. Regardless if you manage yourself or hire it out there is still a cost.
Agree that Residual income is the key to retiring. I thing fliping homes, saving the profit and buying rental properties with cash is a much better way.
The Days of buying and hold are over, it is time to turn and burn properties. The real estate market has not seen the bottom. There is also a time value of money cost. If you use the cash to buy properties with and resale there is a gain on that as well.
In an appreciating marketing it makes lost of since to buy properties and hold them until there is a great return. The key to that is selling them once the values hit high.