Is it possible to qualify for a HELOC after securing cash from an equity sharing investor like HomeTap? If possible, is it advisable? Looking to identify all funding avenues & combinations for BRRRR #1. Thanks!
Hi David! The short answer is yes, it is possible to qualify for a HELOC after securing a cash investment from Hometap, but I can't speak for other home equity investors. The HELOC (or other junior lien) must be approved by Hometap's underwriters, and is approved on a case-by-case basis. Hometap looks at things like the homeowner's ending equity after the transaction as well as the terms of the loan itself to determine if they can approve it. They typically want the homeowner to maintain at least 20% of their home equity. They also check to make sure it is a traditional HELOC or home equity loan without any balloon payments or mortgage share attributes. I hope this answers your question!
Thanks, Loraine. Your guy Zach Mason, in fact, did a great job explaining. We're about halfway through identifying all options. At this point, it's looking likely that Hometap will be part of the solution to get us started.