Re: Have 100K in equity what next? - Posted by youngsterz (UT)
Posted by youngsterz (UT) on February 22, 2002 at 22:46:14:
An equity line on the condo would be a tough sell because banks don’t like to make seconds or credit lines on properties that aren’t your primary residence. Your better option on that property is a cash-out refinance, but that costs a fair amount in refi costs, and makes that money a little more expensive, even with the decent rates these days (you should be able to get a refi up to 80% for low 7% range.)
BUT, a line of credit on your house is about as easy money as it gets. You can get a line at most of the major banks for up to 95% of the value (after the first mortgage) and be paying interest only on a variable rate of low 6% range.
You can get into 1 or 2 family units for 90% LTV, and the bank is happy to loan that if your credit & income are decent. Your better bet is to find the deals where the seller will carry at least 10%, preferably 20%, and you can leverage more deals with your resources.
Dive in; get educated on your financing options. Find a good lender to educate you. I think that is the key to a real estate investors success: Other People’s Money, and the banks have money to lend, especially to their best customers (and repeat customers!).
I’ve leveraged about $80,000 from my home equity into properties worth about $750,000. That has been over the last 4 years, and I look back and can’t believe I wasted that money putting 10%-20% down on those properties! I won’t do that again. . . . There are too many deals out there where the seller will carry at least 10%, and the bank will carry the rest.
Good hunting and good luck!