looking for advice

Greetings: I’ve been in this business for 2.5 yrs. I’ve bought & fixed 6 places. Still holding: 1fam. student rental (mkt value 85k, net=8k/yr, no mtg.), 2fam. (mkt 55k, net=2.4k/yr, mtg.), 4fam. (mkt value 115k, net - 16k/yr, no mtg.), and a note (43k note 9% amort. 10yrs 5 yr call, 500/month payment getting paid).

My question: I have a chance to buy up some great fixers at a price (example: 4 fam+ storefront, I can buy for $40k, 25k to fix, ARV=140+/-, or buy warehouse for $25k on spec, and sell for $75 in a year if a development goes through nearby) that I intend to “flip”. There are about 5 other similar legitimate deals I just learned about, but I need about $125,000 to take advantage of them. Do I sell what I have, do I borrow against what I have, or do I get “hard money” and pay the costs?

Any advice from those more experienced in this area would be very much appreciated.

I don’t have the experience to give you any advice. But you’ll need to give more information about your credit score, available equity, liquid assets etc… You’l also need to be more specific on the details of the property you want to aquire. The seasoned vets on this site will be able to help you better. Good luck.


How is your credit? If you can go full doc utilize the equity you have in your existing properties and do a conventional cash out loan to re-invest. Certainly will be less expensive than hard money (less points/higher LTV) but not as fast depending on your whole scenario. A good broker can get it done in around 2 weeks.

Thanks - my credit score is about 680, and my liquidity? hard to say, but I have a reserve that I plan not to ever have to get to. I’m self employed, and so my income is irregular. I’ve never used a broker, so maybe that’s what I’ll do. If I want to borrow from a HML, let’s say $30k for a rehab I hope to have on the market by late May/early June, what will that cost me? Thanks for the advice here - Kelly

Hi Kelly,

There are many options with your given circumstances. Here are a few…

  1. Sell one or all of your homes with owner financing. You can then use the note as collateral for other RE purchases.

  2. Or you hold the note for a month(for seasoning) and sell part of the note. Say the first 5-7 years of payment, this will result in minimal discount of the note by the note buyer and will allow you to receive cash flow on the back end.

  3. Refinance or finance the properties- This is great option with interest rates so low. This is borrowed money so it’s tax free! It will also help protect your assets b/c they will be more leveraged.

  4. HELOC - A home equity line of credit will allow you to pull equity out of your home as you need it so that you don’t pay interest on the borrowed money until you use it.

Tarac spelled it out correctly, the only thing I will add is make up a written plan of action with all the numbers and exit strategies. Follow that plan.
Your banker and broker will appraciate that and it will assist in being able to leverage your equity and earn some experience.