HELOC on investment property in Texas

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HELOC on investment property in Texas

Tina Felix
Member since 2023 · 6 posts · 1 vote

I'm still pretty green here, I have one investment property in Texas that I was able to afford via house hacking, but now that my growing family needed to move into something bigger, it's time to get another investment property. I don't have much money to put down in cash, so I was hoping to take out some kind of HELOC on my investment property. Is this something that I can do? Any help is appreciated. Thank you.

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  • Jason WrayPro Member
    Banker · Nationwide · Member since 2020 · 2k+ posts · 1k+ votes
    2y

    Felix,

    You might be better off trying to go the DSCR route since getting a Heloc on an investment is extremely hard. There are investors who offer them but they usually oly offer 60-65% LTV/CLTV plus it required No income - just rents.

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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 673 votes
    2y
    Quote from @Tina Felix:

    I'm still pretty green here, I have one investment property in Texas that I was able to afford via house hacking, but now that my growing family needed to move into something bigger, it's time to get another investment property. I don't have much money to put down in cash, so I was hoping to take out some kind of HELOC on my investment property. Is this something that I can do? Any help is appreciated. Thank you.

    Hi Tina,

    You most likely would end up having to use a DSCR cash out. Here's why:

    - unless you strategically reported your taxes as making 100% income and not reporting an entire loss on your schedule e - you will most likely not find a lender who will qualify you for a HELOC. As far as I know, DSCR HELOCs do not exist and most of the trustworthy outlets I'm also aware of put 2nd HELOANs (DSCR) on pause. HELOCs and HELOANs do exist for rental, but with prime so high and secondary tier of LLPAs associated with these programs, you'll be above 10-11% all day. And again, that's if you can qualify with traditional income.



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  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    2y
    Quote from @Tina Felix:

    I'm still pretty green here, I have one investment property in Texas that I was able to afford via house hacking, but now that my growing family needed to move into something bigger, it's time to get another investment property. I don't have much money to put down in cash, so I was hoping to take out some kind of HELOC on my investment property. Is this something that I can do? Any help is appreciated. Thank you.

     @Tina Felix My first question on these requests is why a HELOC? It sounds like you are looking for funds for a down payment. When you are looking to borrow the down payment that loan will likely not be paid back quickly. In that case you would want a fixed rate not a adjustable rate like a HELOC. Borrower short on a variable rate (HELOC), borrow long with a fixed rate.

    I can potentially do either for you but would suggest a fixed rate either first or second mortgage. 

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  • Jacob Sherman
    12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
    2y

    Yes definitely . you are able to go to 90% CLTV full doc

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