Parts Catalog Accessories Catalog How To Articles Tech Forums
Call Pelican Parts at 888-280-7799
Shopping Cart Cart | Project List | Order Status | Help



Go Back   PeachParts Mercedes-Benz Forum > General Discussions > Off-Topic Discussion

Reply
 
LinkBack Thread Tools Display Modes
  #1  
Old 06-20-2005, 07:44 PM
Plantman's Avatar
Registered User
 
Join Date: Jan 2003
Location: Miami
Posts: 2,133
Line of credit on home.,,,,,

My mortgage company has approved me for a line of credit and I was wondering if this is good deal or not:

50K line of credit, prime plus 0%. Even borrowing the 50k , my loan to value ratio will still be under 80%. eliminating any PMI.

They pay all costs including doc stamps. I have zero out of pocket expense, and no expenses will be added into the line of credit.

It's good for 10 years. At which time I'll have to repay it or start all over again.

I've never done this before and was wondering what some others out there might think.

I was thinking about paying off a small loan I have and keeping the rest available to see if any other realestate opportunities pop up. If not, I'll let it sit unused.

I have pretty good disipline so I'm not worried about using it foolishly.

Thoughts?

__________________
Enough about me, how are you doing?
Reply With Quote
  #2  
Old 06-20-2005, 08:03 PM
MedMech
Guest
 
Posts: n/a
Buy more real estate with it.
Reply With Quote
  #3  
Old 06-20-2005, 10:00 PM
Banned
 
Join Date: May 2002
Location: Blue Point, NY
Posts: 25,396
You have a fine deal there. Borrowing at prime is always attractive, especially when the lender pays all the costs.

Just don't be frivilous with it.
Reply With Quote
  #4  
Old 06-20-2005, 10:31 PM
Plantman's Avatar
Registered User
 
Join Date: Jan 2003
Location: Miami
Posts: 2,133
Quote:
Originally Posted by MedMech
Buy more real estate with it.
That's what I plant o do if the right deal comes along. Perhaps some income producing property that will pay the loan off for me as it appreciates.

Thanks

BC, I will definitely not be frivolous. Can't afford to be.
__________________
Enough about me, how are you doing?
Reply With Quote
  #5  
Old 06-20-2005, 11:12 PM
MedMech
Guest
 
Posts: n/a
Quote:
Originally Posted by Plantman
That's what I plant o do if the right deal comes along. Perhaps some income producing property that will pay the loan off for me as it appreciates.

Thanks

BC, I will definitely not be frivolous. Can't afford to be.
Don't overlook vacant land, since selling my Med biz I've been scooping vacant lots that have favorable zoning. If you play your cards right it's an easy double and the risk is much lower than a fixer upper.

The best place to look is homes in fully built neighborhoods on double lots, building potential maybe so-so but the adjacent neighbor sometimes pays stupid money to prevent a smaller house next door from being built. Once you get the lot stake out the smallest salt box foundation you can. If it's a good neighborhood you'll be taking bid's in 24 hours.
Reply With Quote
  #6  
Old 06-21-2005, 01:49 AM
Orkrist
Guest
 
Posts: n/a
I agree with the vacant land idea. It is important to consider the homestead excemptions for bankruptcy law, etc. I don't know anything about the new changes to B law but it isn't going to get any easier/better for you if things go south. Homestead stuff is usually state specific, and right now I think its Kansas, Florida, Texas and a few other states that allow you to keep a house and cram down a car, IIRC. But, hey, a lot of people I know get a line of credit along with a new home loan so they can borrow to pay their mortgage if they gat canned or their firm doesn't work out. Nothing wrong with having it if you're a disciplined person. The lots near me that are just due South of the most recently "suburbanized" area are going for quite a lot of money per acre. Might be nice to buy and wait for Wal-Mart/Target/XYZ Prop. Dev. inc. to find you...
Reply With Quote
  #7  
Old 06-21-2005, 09:13 AM
Plantman's Avatar
Registered User
 
Join Date: Jan 2003
Location: Miami
Posts: 2,133
the ladn buying boom in SFL has passed me buy as single family lots are way too expensive.

Central florida is blowing up as people who want to retire or slow down from Miami/Ft LAuderdale or have been priced out are moving there.

1.5-2 years ago you could have bought 5 acres lots fro 60-80k. Those same lots are going for well over 125k.

The gainseville are is still relatively inexpensive and I will be visiting shortly.

Thanks
__________________
Enough about me, how are you doing?
Reply With Quote
  #8  
Old 06-21-2005, 05:06 PM
GermanStar's Avatar
Annelid wrangler
 
Join Date: Apr 2002
Location: Fountain Hills, AZ
Posts: 4,932
I know you get a better rate on a primary residence...
Reply With Quote
  #9  
Old 06-21-2005, 05:44 PM
MedMech
Guest
 
Posts: n/a
Quote:
Originally Posted by narwhal
Wait a minute real estate investors........why would it be a good idea to buy an investment property using your home vs. the investment property as security?????

Because entry level investors need the initial dough to put down especially on vacant land. 125% of appraised value is available but the intrest rate defeats the purpose.

Gee Nar do i have to teach ya everything
Reply With Quote
  #10  
Old 06-21-2005, 05:56 PM
MedMech
Guest
 
Posts: n/a
Quote:
Originally Posted by narwhal
Entry level investors that don't have the initial dough shouldn't be setting themselves up for a "double" housepayment or worse if they lose on, or lose outright, the investment that was purchased. Hence the question.


To grab the balls or not grab the balls.......that is the question.

and you know how I operate ain't pretty but it works.

With that said I really don't recommend anyone take my route on investments because I do admit that I take a ton of risk, at this point in the game I don't leverage my personal property against investments. I'm batting 1000 but that doesn't mean I haven't had to do some creative stuff for a save.

And the #1 rule in real estate investment is knowing how to craft a save, spending money is the easy part.
Reply With Quote
  #11  
Old 06-21-2005, 05:57 PM
Banned
 
Join Date: May 2002
Location: Blue Point, NY
Posts: 25,396
Quote:
Originally Posted by narwhal
Entry level investors that don't have the initial dough shouldn't be setting themselves up for a "double" housepayment or worse if they lose on, or lose outright, the investment that was purchased. Hence the question.
If you plan to purchase vacant land, you typically must do this with cash. You can obtain the cash from your own personal residence. It's normally difficult to get a loan on vacant land.

If you plan to purchase improved property, you can probably get a better interest rate on your own home equity line of credit than you can otherwise get on investment property. However, the equity line carries the risk of rate increases, whereby the mortgage on the investment property can be a 30 year fixed mortgage. This makes more sense and limits the risk over the term of ownership.

Note that the cost to obtain a home equity line is usually $0. but the cost to obtain a traditional mortgage on the investment property will typically run 3-4% of the amount borrowed. It's tempting to use the home equity line.

Of course, there are the risk takers that borrow the down payment from their own home equity line of credit and finance the remaining 80% of the investment property. This maximizes the return on the investment, however, it carries the greatest risk of default, because of the hefty carrying charges on a 100% loan.
Reply With Quote
  #12  
Old 06-21-2005, 06:20 PM
Registered User
 
Join Date: Nov 2004
Location: Nova Scotia, Canada.
Posts: 6,510
I live in canada but believe one should not build little pyramids as the risk can become too great. If the investment cannot secure itself why would you want it to start with? When I dabbled in morgages that was one of the conditions I imposed automatically as too many institutions are all too willing to go along as they have absolute security. I much preffer a person to walk away if he has to rather than loose everything for a couple of interest points. Understand risk well just like to minumise it as never had a crystal ball. Most real loans are predominently character based anyways. If you cannot find financing for investment purposes perhaps you have to look at what you are doing and yourself as well. Not meant to be cruel just have seen far too many people burnt. Example, guy purchased all the land around me where I live about 12 years ago and subdivided it to sell in future. Now because of enviromental requirements the lots cannot be economically developed. At time of purchase he thought he had a sure thing as town was expanding in this direction. If he secured with his equity in what he owned already guess it is gone now. But if a freestanding loan the institution probably takes a beating instead as they shared the risk.
Best bet for the small guy is still medium to large existing apartment buildings in my opinion. We cannot buy any here anymore as individuals because the large corporations suck them all up as it is almost a licence to steal if you examine it properly and understand it well. Just a few thoughts and know my views are alien to some extent with current practice.
Reply With Quote
  #13  
Old 06-21-2005, 07:08 PM
Banned
 
Join Date: May 2002
Location: Blue Point, NY
Posts: 25,396
[QUOTE=narwhal]
Quote:
Originally Posted by Brian Carlton
If you plan to purchase vacant land, you typically must do this with cash. You can obtain the cash from your own personal residence. It's normally difficult to get a loan on vacant land./QUOTE]

I have never had a problem getting a loan on vacant land. The difference may be that the land I have purchased has trees on has been cleared for farming, which may not be the case in your area.
If you clear the land and use it for farming, I presume the bank will loan money based upon that use. However, here, you purchase the land for investment only, and there is no possibility of income. So, the banks typically won't loan on it.
Reply With Quote
  #14  
Old 06-21-2005, 07:21 PM
MedMech
Guest
 
Posts: n/a
Vacant land is considered non-conforming to Freddie Mac Fannie mae reg's. Many banks do loan on vacant land but the loan comes out of the banks account as unsecured for securities laws. Many private investment companies do ofter vacant land loans or mortgages. Just like any other loan it all depends on who you or your company are. Farming or no farming.

What are the guidelines for vacant land?

All over the place.
Reply With Quote
  #15  
Old 06-21-2005, 07:44 PM
TwitchKitty's Avatar
Я не хакер
 
Join Date: May 2004
Location: Varies
Posts: 3,568
So far this discussion is about a HELOC, also read about an HEL. HEL is a fixed interest loan that can be had with no costs. One strategy is to use a HELOC to purchase a second house, etc and then get an HEL on the new property to pay off the HELOC. This is a way to avoid mortgage fees and mortgage insurance.

__________________
Don't believe everything you think. Especially don't believe everything that you feel. Radical Subjectivism is rampant on this forum.
Reply With Quote
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
Greenspan's credit bubble crash9 Off-Topic Discussion 1 03-21-2005 01:47 AM
Price of one injector line $33!!!!!!!! Sooty Taillight Diesel Discussion 9 07-19-2004 08:37 AM
Brake line ? on 83 240D dreamliner77 Diesel Discussion 2 06-26-2004 04:01 PM
Air bubbles in fuel line. 3jocks Diesel Discussion 3 10-23-2001 12:54 AM



All times are GMT -4. The time now is 03:53 AM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
Search Engine Optimization by vBSEO 3.6.0
Copyright 2018 Pelican Parts, LLC - Posts may be archived for display on the Peach Parts or Pelican Parts Website -    DMCA Registered Agent Contact Page