HELOC question, first time investment

[Tasha Davis]

Does anyone have a HELOC? I will be closing on my first investment home in about a month and I was wondering if I should request a HELOC now or wait until I have some money invested in the home. I got it for 95,000 and it is appraised at 120,000- obviously I have nothing invested in the home yet, as I don't own it yet. There are a few repairs that are needed, nothing major, but I would rather get it all done at one time than save and fix one thing and save some more and fix another thing (UNLESS THIS IS THE BETTER THING TO DO) thoughts? ideas? suggestions?

[Corby Goade]

It is possible to get a HELOC on an investment property. Most big, national banks won't touch them, but you'll find small regional banks and credit unions that will. I have two, as a matter of fact. It's a great tool to grow your portfolio if you are patient and disciplined.

It's not really necessary to close on the HELOC at the same time you close on the house. It's not likely that the same bank holding your mortgage will also hold your HELOC. Also, HELOCs are usually no closing costs- at the most, you'll have to pay for an appraisal, but sometimes the bank will pay for that too, and you can just sign for the HELOC at the bank. If this is something you really want to do, you might start shopping sooner than later, as typically if you have a third party appraisal that is less than three months old, the bank will honor that value for your HELOC and you can avoid spending another $500 on a new one.

Good luck!