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.

Neil Goradia, Broker in Indiana (#RB17001290)
317-446-7654

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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