Advice for my next real estate purchase

3 Replies

Hi this question is for Southern California home owners. I have a little money to invest right now and I don’t own a primary home yet, I have a few investment properties. My banker says there’s more options in terms of using equity if it’s a primary home. Should my next purchase be a primary home in hopes of building equity by next year to give me more leverage in pulling out that equity? I know it’s an open ended question but advice would be helpful. Thank you.
@Navid Sadighi If you don’t own a primary home I’d like for a mf. 2-4 units. Lower your monthly payment, build some equity, get some tax write offs, and eventually pull out some cash or HELOC off of it. That’s the route I went and has paid off huge. Good luck! - Mike

Hey @Navid Sadighi

When you say “more options in terms of using equity if it’s a primary home“ - you are referring to your ability to pull out cash against your equity, correct?

If so, then yes - a primary residence will (typically) offer an easier means of tapping in to your equity. The reason for that is lenders allow much higher LTVs (96.5% vs 80% for non owner occupied) as well as offer HELOCs when financing a primary residence.

@Navid Sadighi what loan to value are you going to be able to buy at? Lenders generally want to give up to 80% LTV on a HELOC. If you are buying at 5-10% down it will take a while to build enough equity to get a HELOC.

Expecting a property to appreciate enough in 1 year is is not a high probability plan. The are lots of good reasons to buy a home to live in. Expecting to use it for a HELOC is not one of them.