BIG decision to make.... NEED Help and Advice please

[Michael Dunn]

So I have been running the numbers for various possibilities on how best to use the Equity I am looking to use on my Primary, for the Use of Investing it .

I'll give a " Quick " Breakdown on where I am currently at .... Financial wise, as well as what my options are 

CURRENT SITUATION:

I have $40,000 of Equity in my Primary

I can use my VA loan to get the full $40,000 out of the Equity if I want to ... Although i don't really want to MAX out all of my Equity

I got Denied a Loan to Purchase an Investment property through Two seperate Portfolio Lenders in my area ( Due to my DTI ratio being near the MAX ..... I could only Qualify for a $180 Note roughly , which would put me at the 45% mark on the DTI..... This would allow me for a Loan through either of the Portfolio Lenders of around $25,000 ...... Can't get much of a Property in my area that's in a decent area for that price .

Also, if I refi. my current Primary into a VA Loan ( currently it's financed via FHA loan ), this will tie up my Primary for another Year, whereas I have been living in my primary for 7 months now ...... I was wanting to use my VA loan to purchase another Primary at the First of next year . But if I refi. using that VA Loan , I'll basically be starting from scratch and will lose that 7 months that I've been living in my Primary and will have 1 year before I could use my VA loan, vs just a 5 month wait if I don't refi. using VA loan.

Buttt, I can ONLY get upwards of 100% on the Refi, if I use the VA loan vs just 80% if I get the refi,. using Conventional

Soooo, I have been weighing my Options ....And an 80% refi.  would give me $20,000 in Cash to use to Invest with , where as 100% refi. would give me $40,000 to Invest with ..... Definitely a Big difference 

It's hard to do much with jt $20,000 in Cash to Invest in Real Estate with ..... Especially when you can't Take out a Loan to purchase a Property 

Now with $40,000 ...... I might could find a $30,000 property and put about $8,000 into it + closing Costs that has an ARV of $60,000 ...... So $20,000 of Equity in it

I've even considered getting 1 -2  Section 8 properties, although i know there is definitely some risk involved.

Questions please......

1. Can you ever have 2 VA loans at the same time ...... I.E. use it within say 2 -3 months apart , for the purchase of 2 properties ?

3. Should I go with a Cash-Out refi . OR do a HELOC ?

And does one of them give you a higher LTV over the other ?

2. I was told that the fact that I have a renter in the Mother-in-law wing of my property who pays rent, can NOT be factored in.... because It hasn't been 2 years that e's been a tenant via shows this on my Taxes .

If I could get the Lenders to see that he has been there for longer than 2 years ( he's the same tenant that was there with the previous owner, before I bought the property ) ..... This would DRASTICALLY drop my DTI down to around 20% ( as the amount he pays in Rent , pays all of my House Note .... PITI )

Thank you to the Community here for all of everyone's help and Advice.

I have this Equity that I can use, and just need some help in figuring out how best to use it ,and what LTV to go with ( 80% giving me $20,000 or 100% giving me $40,000 .... but tying up my VA loan for a year

[Rod Hanks]

If I'm reading correctly you can't finance a house because your DTI is too high so you are looking at getting 20-40k in equity from your home to buy a rental property for cash????

If that's the case, I would recommend paying your debts down first before you buy a rental. Because stuff happens in this business and you better have cash or you will be in trouble. Let's say that you get the 40k in equity and buy a rental for cash for 40k...the AC goes out, the water heater goes out, and the roof leaks in the first 2 months.....big trouble!!! 

I would recommend paying the debts down to get your DTI in order, refi to get the equity and use a portion of the equity for the downpayment on a rental in a good area. 40k houses will have 40k problems.

I know this is probably what you didn't want to hear, but if a portfolio lender is telling you your DTI is too high you need to listen.

Good Luck!!!