Home Equity for Down Payment of SFR's Out of State?

3 Replies

I'm new to investing, live in CA and have 200K + in Home Equity that I would like to use for out-of-state turnkey SFRs. Two questions:

- Would any lender consider providing both a home equity loan (for down payments) & also providing financing for 2-4 SFRs under their umbrella?

- If not, then I'm wondering if securing the HEL would diminsh my ability to finance the SFR's independently (ideally within the same timeline to close).

I have a solid credit score and f/t income that is strong, but would like to streamline the process as much as possible. For example, I don't want to qualify for the HEL and then be turned down if I apply to mortgage the SFR's within the same time period.

These SFR's would be for buy and hold, but I'd be able to pay off the HEL in 5 years, although would look for a 10 year term most likely.

I'm also exploring who/where people have had positive experiences with Turnkey properties since some companies seem questionable.

Thanks for any help!

@Melinda Warren , if you're looking out of state for your SFR's, then there is a good chance your HELOC will be enough to buy 2-4 SFR's cash, especially if you look in the midwest. I'd just start with the HELOC, and after you buy a few deals you could probably qualify for a new loan on your subsequent property purchases. You are correct that if you try to get too many loans at once you may run into problems.

Thanks Neil & James! I went ahead with the HEL and am going to wait on the SFR's until I'm on the other side of my 1031 exchange. My plate is full enough and I think getting more focused is the best approach at the moment. I'll circle back with other questions that will no-doubt creep up along the way!

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