Skip to content
Creative Real Estate Financing

User Stats

13
Posts
1
Votes
Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
1
Votes |
13
Posts

HELOC & then Cash Out Refi???

Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
Posted Jan 25 2022, 11:10

I've been saving cash to start my BRRRR project my Family wants a pool built. Our primary home had accumulated at least $50k of equity in 9 month (From $248k to $307k). My question is, if I tap into my equity through HELOC to build a pool in our backyard ($60k to build), then appraise the house after pool build (approx $400k comps), how soon can I Refinance our house? I want to cash out some equity to begin my first project after the pool project. Any constructive input is appreciated.


Rommel

User Stats

1
Posts
1
Votes
Marson Maynor
  • Lender
  • Northern Illinois
1
Votes |
1
Posts
Marson Maynor
  • Lender
  • Northern Illinois
Replied Jan 25 2022, 14:20

Hello Rommel!

A HELOC may be accessible up to 85% Loan-to-Value(LTV). Assuming your home appraises for $307,000... 85% LTV = $260,950. Subtract your current mortgage balance and that would be the estimated amount available to borrow.

User Stats

7,765
Posts
6,120
Votes
Andrew Postell
Lender
Pro Member
#1 Creative Real Estate Financing Contributor
  • Lender
  • Fort Worth, TX
6,120
Votes |
7,765
Posts
Andrew Postell
Lender
Pro Member
#1 Creative Real Estate Financing Contributor
  • Lender
  • Fort Worth, TX
Replied Jan 26 2022, 07:49

@Rommel Rosales if I'm tracking this correctly, you are saying that you can build a $60k pool and gain $100k in equity - do I have that right?

Guaranteed Rate Logo
BiggerPockets logo
Find, Vet and Invest in Syndications
|
BiggerPockets
PassivePockets will help you find sponsors, evaluate deals, and learn how to invest with confidence.

User Stats

6,407
Posts
2,653
Votes
Brent Coombs
  • Investor
  • Cleveland, OH
2,653
Votes |
6,407
Posts
Brent Coombs
  • Investor
  • Cleveland, OH
Replied Jan 26 2022, 09:13

@Rommel Rosales, at this rate, it looks like your family may continue to be prioritized over your BRRRR ambitions. Many times, a pool becomes a liability rather than an asset.

This time a pool, next a new safe (read: expensive) car, then a much deserved cruise...

Lifestyle choices can smother otherwise good intentions to become an investor.

[I'm not suggesting you sacrifice lifestyle; just continue with what's really important].

Note: $50k theoretical increase in equity does not translate into $50k extra borrowability.

Using Marson's formula above, how much borrowability does result?  Good luck...

User Stats

13
Posts
1
Votes
Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
1
Votes |
13
Posts
Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
Replied Jan 26 2022, 17:38
Originally posted by @Andrew Postell:

@Rommel Rosales if I'm tracking this correctly, you are saying that you can build a $60k pool and gain $100k in equity - do I have that right?

Hi Andrew, based on current home equity and the comparable homes with pools it may be close to $100K. My goal is just to get that $60K back after refi. I guess my main question in this post is >How soon can I refi the home after the pool build is complete using HELOC?

User Stats

13
Posts
1
Votes
Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
1
Votes |
13
Posts
Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
Replied Jan 26 2022, 17:43
Originally posted by @Brent Coombs:

@Rommel Rosales, at this rate, it looks like your family may continue to be prioritized over your BRRRR ambitions. Many times, a pool becomes a liability rather than an asset.

This time a pool, next a new safe (read: expensive) car, then a much deserved cruise...

Lifestyle choices can smother otherwise good intentions to become an investor.

[I'm not suggesting you sacrifice lifestyle; just continue with what's really important].

Note: $50k theoretical increase in equity does not translate into $50k extra borrowability.

Using Marson's formula above, how much borrowability does result?  Good luck...

Hi Brent, Absolutely Family always comes first! I understand I can only get 85% at the most LTV for HELOC, I guess what I am trying to figure out with this post is to find the answer to my main question: How soon, can I cash out refi a home after home improvement using a HELOC? I now realized, I probably should've left out the story about building a pool! ha!

Rommel

User Stats

13
Posts
1
Votes
Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
1
Votes |
13
Posts
Rommel Rosales
Pro Member
  • Rental Property Investor
  • Port Charlotte, FL
Replied Jan 26 2022, 17:48
Originally posted by @Marson Maynor:

Hello Rommel!

A HELOC may be accessible up to 85% Loan-to-Value(LTV). Assuming your home appraises for $307,000... 85% LTV = $260,950. Subtract your current mortgage balance and that would be the estimated amount available to borrow.

 Hi Marson,

Thanks for such detailed explanation. I do plan on tapping into what ever equity that is available just incase my fund runs short. Question: How soon can I Cash out Refi (Assuming there's a marginal equity built) after the home improvement is complete using HELOC. Thanks in advance!

Rommel