Hey fellow Real Estate professionals. Looking for some financial advice here so would appreciate any info from the community.
Current Job Situation:
- Full time 40 hrs a week employee
- Part time real estate investor
- Plan on moving to full time real estate 1st quarter 2020
- I’ve saved my whole life so I landed to own 6 properties debt free
- I have a HELOC out @5% for 180K on my primary residence that I used to purchase another investment property outright. (No plans on paying off anytime soon)
- No mortgages or debt
- Credit score 790
- I am looking to most effectively leverage my debt after I quit my full time job next year and go full time into real estate. I am looking to flip homes so I'll need access to capital quick when deals come up. That is the reason why I have my current HELOC loan
- How should I use my current income to get out as much access to money as I can before I quit?
- Some ideas that I’ve kicked around are:
- Leverage my other homes for more HELOCS. The HELOC rates on a investment property are in the 7.75-8% range so I cringe when I hear that.
- Get a mortgage out on the home I currently have a HELOC out on at a fixed lower rate. This would free up my HELOC to be used on another property. I'm not sure what this process is called though?
- Get a mortgage out on another property I have which I own outright. I am also not sure what this would be called?
Again, any help on what I should be doing in the upcoming 6 months would be very much appreciated!
@Jason Chao , if you want to pull cash out of your existing properties that are currently unleveraged, it's just called a Cash-Out Refinance, a very common transaction. Plenty of lenders will do it. Interest rates on these will always be higher than a purchase-money mortgage for a primary residence.
Alternatively, you could explore a LOC on the investment properties, but very few lenders do these. Call your favorite local title/closing companies and ask them who they've seen doing them recently. . The other, less favorable, approach is to just call around to local banks and ask...you might call ten banks and find one that'll do it. Calling a Title Co is much more efficient, in my opinion. (Plenty of threads on BP about this, just search).
No matter what you do, secure financing before you quit your W2. Once you quit, it becomes much more difficult to qualify. You might need up to two years of steady rental/other income on your tax return.
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