Realtor · Pensacola, FL · Member since 2019 · 89 posts · 30 votes
Hey All,
I'm interested in understanding what my HELOC options to potentially buy more real estate or to use for business purposes. I just recently got laid off from my job about a week ago though I am actively interviewing for a new W-2 job.
I currently own 6 properties that are all cash flow positive. I can qualify for a HELOC with my credit score. My previous 2 years tax returns are good though my DTI was right around 45% percent before losing my W-2.
Is there a HELOC option for me or do I have to get another W-2??
I'm interested in understanding what my HELOC options to potentially buy more real estate or to use for business purposes. I just recently got laid off from my job about a week ago though I am actively interviewing for a new W-2 job.
I currently own 6 properties that are all cash flow positive. I can qualify for a HELOC with my credit score. My previous 2 years tax returns are good though my DTI was right around 45% percent before losing my W-2.
Is there a HELOC option for me or do I have to get another W-2??
Thanks in advance & any feedback helps!
Dustin
Banks want to know how they will get paid back. If there is enough cashflow to service the debt on the properties, pay your bills and have some money left over, you might find a local or regional bank or a credit union to do a HELOC.
The big bugaboo is that when markets turn, like this is, banks stop lending or make it very difficult to borrow until they know what the market is doing. Call a credit union first and see if they will do your HELOC for you.
Be aware that any portion of an unused HELOC can be closed out at anytime without warning.
If your HELOC is $100,000 and you use $35,000, they can close out the remaining $65,000 without notifying you in advance. Experienced investors withdraw all of the HELOC and deposit it in a bank other than the bank the HELOC is with. This preserves the access to the HELOC for when it is needed.
I'm interested in understanding what my HELOC options to potentially buy more real estate or to use for business purposes. I just recently got laid off from my job about a week ago though I am actively interviewing for a new W-2 job.
I currently own 6 properties that are all cash flow positive. I can qualify for a HELOC with my credit score. My previous 2 years tax returns are good though my DTI was right around 45% percent before losing my W-2.
Is there a HELOC option for me or do I have to get another W-2??
Thanks in advance & any feedback helps!
Dustin
Banks want to know how they will get paid back. If there is enough cashflow to service the debt on the properties, pay your bills and have some money left over, you might find a local or regional bank or a credit union to do a HELOC.
The big bugaboo is that when markets turn, like this is, banks stop lending or make it very difficult to borrow until they know what the market is doing. Call a credit union first and see if they will do your HELOC for you.
Be aware that any portion of an unused HELOC can be closed out at anytime without warning.
If your HELOC is $100,000 and you use $35,000, they can close out the remaining $65,000 without notifying you in advance. Experienced investors withdraw all of the HELOC and deposit it in a bank other than the bank the HELOC is with. This preserves the access to the HELOC for when it is needed.
@Mike Hern thank me for your reply, and it make sense to pull it all out in case the bank changes their mind. Wouldn’t you have to start making those monthly payments (with internet) once you put it all in the bank??
@Mike Hern thank me for your reply, and it make sense to pull it all out in case the bank changes their mind. Wouldn’t you have to start making those monthly payments (with internet) once you put it all in the bank??
@Dustin Sanders 1) you should focus on trying to get the HELOC on your primary home as most heloc lenders will not lend on rentals ...2) if your schedule E has significant positive rental income - there might be a chance to get a HELOC 3) contact the lender that has the 1st mtg on your home and also the place where you bank for options 4) try the smaller sized credit unions and banks in your vicinity for options 5) if you cant get the heloc in place now - you can have this groundwork done so that when you do have a new job - you can proceed with it
@Dustin Sanders I have a few ideas that could help. There are loans out there that dont calculate DTI or ask for W2 income. Reach out to me if youd like. Thank you!