Real Estate Agent · Nassau County, NY (Port Washington) · Member since 2017 · 24 posts · 8 votes
Hi BP community!
My mortgage banker suggests that apply for a HELOC on my private house and use those funds for a down payment on a rental property (2-4 units) my goal is cash flow of 10% and appreciation with the rehab/fixes I put into the property. I have $200-300k equity depending on appraisal & am looking in the Long Island area for now with the intention of expanding to other markets (Durham NC).
I'm also looking to switch my old 401k and ira's into a SDIRA, which should get me $150k.
I want to get my finances in line so I can really start taking my analysis of properties seriously and make a move!
Any suggestions? Am I missing something? I feel that HML's as a newbie is not realistic since no one would want to lend to me.
I just took a 60k home equity loan at 4.75% to help with a down payment on an 8 unit commercial property. Originally, I was going to just do a HELOC and pay interest only payments. Due to my current situations and plans for when I might eventually leave my primary residence I opted for the Home equity loan at a 15 year fixed rate. I made this decision right when the last rate hike happened, I believe more are coming (HELOC is not a fixed rate). I'm happy with this decision. Also, I did not use my current mortgagee for the home equity loan. I shopped around a bit and the approval process was ridiculously easy. I literally talked to the home equity lender twice.
You can for a fact find a lander who offers fixed HELOC for primary house. We just opened HELOC with 3.99% fixed rate. 3 years draw period, 10 years Amortization. $0 closing costs, no physical appraisal.
Lincolnwood, IL · Member since 2017 · 7 posts · 0 votes
7y
Hey Shaun...I don’t think you got an answer. I am in the same situation.
I have a HELOC for 100k for downpayments and I will have to get a traditional loan. I'm approved by two different lenders. You do have to factor all the wonderful 😩 expenses plus the HELOC.
My question is if I use the HELOC for a down payment and also my closing cost, in regards to the Rental Calculator, do I not include the closing fee of, let's say $5000, under the closing cost space and figure out what the monthly payment for my HELOC will be and place that amount in the Other Expense space in the calculator?