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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Strategy for income property acquisitions... Posted by Alfred, TRAINEE on May 06, 2002 at 4:39 PM Hi Ward, I just had a bright idea. I own three rental properties out of state that, combined, have a little over 100K in equity. (I just had them appraised.) I can merge them all together and get an equity line of credit (HELOC). Since they are not owner-occupied I can only get a 75% LTV. But I can take that 75K and go off and buy a property (dingbat) for cash; then get a bank loan on the house for the amount I paid for it and pay my HELOC off back down to zero; put a renter in it; set it up with a property manage; move on and do it again and again and again... I would buy in areas that have good growth projections (the next Las Vegas, the next Phoenix, etc.). There are a lot of regions in this country where you can buy a nice rental property for 75K. Since I'm paying with cash I should be able to get in and out of escrow in 2-3 weeks. I'd find deals and also buy from motivated sellers so that I can get a good below market price. I'll structure it all correctly so that the rental income will cover the PITI and other operating expenses. Not having much experience with banks, the main question that I have is... will a bank be willing to give me a 75K loan on a house worth 100K that I own free and clear, so that I can pay my HELOC off and move on to my next deal? Overall, how does this strategy seem to you? Thanks in advance. Follow Ups: Banks aren't so liberal... Ward-CA- 5:16 PM, 05/06/02 (1) Re: Banks aren't so liberal... Alfred, TRAINEE 7:28 PM, 05/06/02 (0) Post a Followup: Name : E-Mail : Subject : Comments: : Hi Ward, : I just had a bright idea. I own three rental properties out of state that, combined, have a little over 100K in equity. (I just had them appraised.) I can merge them all together and get an equity line of credit (HELOC). Since they are not owner-occupied I can only get a 75% LTV. But I can take that 75K and go off and buy a property (dingbat) for cash; then get a bank loan on the house for the amount I paid for it and pay my HELOC off back down to zero; put a renter in it; set it up with a property manage; move on and do it again and again and again... : I would buy in areas that have good growth projections (the next Las Vegas, the next Phoenix, etc.). There are a lot of regions in this country where you can buy a nice rental property for 75K. Since I'm paying with cash I should be able to get in and out of escrow in 2-3 weeks. I'd find deals and also buy from motivated sellers so that I can get a good below market price. I'll structure it all correctly so that the rental income will cover the PITI and other operating expenses. : Not having much experience with banks, the main question that I have is... will a bank be willing to give me a 75K loan on a house worth 100K that I own free and clear, so that I can pay my HELOC off and move on to my next deal? : Overall, how does this strategy seem to you? Thanks in advance. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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