Hi all, I have probably $90k in equity in my main residence, and I want to start buying and flipping/reselling/renting new properties. I already own 4 other properties as buy/hold, but I'd like to quit my W-2 job and get into flipping because I'd rather be out on a site than sitting on my butt on a computer at my current job all day :).
With that said, how are my prospects on getting a HELOC and using those funds to buy properties? I've never done a HELOC. Can you write a check and do a normal closing under this scheme? I'm not concerned with the risk because I have funds available elsewhere to easily cover things if crap hits the fan, but I'd rather not use them/they would require selling things I'd rather not.
I'd considered HELOC a revolbing 'line of credit' like a credit card limit backed by one's existing collateral real property,but apparently is seen as a quick way to purchase indeed, esp if just for the down not the whole purch amount
I have used HELOC to buy rental properties and after acquiring the property, I have approached my lender and refinance and payoff my HELOC so that I can acquire my next property. HELOC is like a bank account where you have funds in reserve for short term.
Currently I have a property under contract which I offered a cash offer and if all goes well will be closing shortly.
You may be eligible to get up to 80-90% of the appraisal value after the remaining loan amount(if any). Community banks are better for HELOC as they are investor friendly.
Most bank does HELOC appraisal quick and for no cost. Typically takes 2-4 weeks based on the bank.
Also, very importantly some banks change penalty for closing the HELOC account within certain number of months. (One time I refinanced and HELOC got closed and they charged me $1500).
Since you are from Marietta, ga Fidelity bank (lion bank) in Georgia is good for HELOC.
I suggest to take up to 75% as the rate may be better.
Heloc is a great way to utilize equity specifically if you are flipping and paying off the note. I recently started a HELO with BECU on an investment property and the process was incredibly fast, three weeks from the application and I was funded. You will be required to open a savings account with the bank you apply at but their terms are really good. Fixed and interest only programs. 80% LTV line and up to three fixed loans on a single credit line. Good luck!