For this post i am looking for a way to create a note secured by equity in a property i own? How would this work? can i create cash from something like this? Who would i need to make contact with? I have approx 50k in equity and would be looking for like 5 to 10k to buy another property. Is this possible can anyone help me understand this part?
Thanks Again
Its called a Home Equity Loan.
jmd_forest
Call your local bank or broker - or even in the financing forum here there are a few guys who could help you out that are great guys.
When it comes to a Home equity loan/lone of credit, it is better to have a loan instaed of a line of credit in regards to the impact on your credit score. A Line of credit counts as a “revolving account” much like a credit card. It affected my FICO by almost 20 pts.
I don’t get why more people don’t do this. First property I bought all cash on a LOC(business doesn’t report to my personal so no FICO change), at a discount of course, fixed it up, rented it. Appraised at 40% above my total cost. Cash out refi for what I owe in it at 5.5% one month later. ANY bank will do this if you have tons of equity. Why wouldn’t they? All of this meets fannie mae or freddy mac guidelines, seasoning has never been an issue, so you don’t have to even worry about finding non-conforming lenders, which are going to charge you more interest by the way.
So what you get is, a rental with no money down and as long as you hurry with repairs and getting a tenant in ASAP (you should!!) only one months interests on a LOC. I don’t even tell the bank about the LOC.
One more piece of advice I learned the hard way, if you have an LLC, don’t deed it over out of your personal until you do the refi. unless you want to pay 8.25% interest!! :banghead
I’m still new at this I will admit, but I am starting to realize that this is mostly a game of finance, and I can’t figure out a better way to buy rentals than this.