Home equity line of credit?

[Amanda Roy]

I’m in the process of opening up a home equity line of credit, I currently have a mortgage on that property, and I have the opportunity to buy another one, but would like to use a line of credit to use as the down payment. Can I Cash out refinance on the second property in 6 months to pay off the line of credit? 

[Brittany Minocchi]

Quote from @Amanda Roy:

Quote from @Brittany Minocchi:

Assuming you've got enough equity in the property in 6 months and the lender doesn't have a longer seasoning requirement, sure. Are you planning on doing any sort of a value add? 

No the new property I’m looking at is turn key. 

Numbers probably wouldn’t work if there’s no rehab needed. Cash outs are usually 75% LTV. Say you buy a property for $300k, put 25% down and finance $225k. If it’s still worth $300k in 6 months 75% LTV puts you at that same $225k, so you don’t have any equity to pull.

Also keep in mind that depending on the type of financing and the timing, the amount you can pull may be based on purchase price even if there is rehab.