I have a primary and a rental. I began a HELOC loan process to use funds to help pay for a new rental, but lost the property I was intending to buy with it, but it raises a question for me: If I continue to get the HELOC and it resides there ($150K unused), I assume this will greatly impact my ability to get more traditional financing in the future should I go that route.
I am trying to understand how you folks are able to use existing home equity to buy more properties that don't show income NOW, thereby pushing your income/debt ratio higher than banks allow. IN short, how are you able to use equity to do this? When i read the posts in here they make it sound easy, but my banks say no. They wont count "future income" as it doesn't exist yet.
@Matthew W. , Usually banks won't count the profits from your rental either until after 24 months. The HELOC shouldn't affect your credit until you use it, and thus the juice starts. The way to use your money is to BRRRR. This will allow you to pay your HELOC off each time after use. The difficult part would be you finding a deal where you can buy in cash, repair using cash, and then refinance it into a long term loan. Thus you get all your funds back to pay off your HELOC, and you now have another property. You continue to do this until you hit the next road block. The bank is more inclined to invest in a deal that you own vs. a deal your applying for with 20% down. I hope this helps a little, and good luck in your future dealings!