San Jose, CA · Member since 2016 · 1 post · 0 votes
I am new to BP and will be using a HELOC to purchase my first investment property. I am thinking of going with a turnkey route and paying off my first investment with a heloc then refinancing to 30 yr fix and doing it all over again. However, my questions is if its possible to cash out refinance a turnkey SFH? My understanding is the turnkey companies do not leave any meat on the bones. Therefore, limiting the cash out opportunity?
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
10y
Potentially true. It all depends on when in the market cycle you buy (whether or not it's anticipating appreciation pretty quick or not), and how soon you are wanting to refi. Where we are in the current real estate economy though, there aren't really any major appreciation waves scheduled for any of the cities.
How much capital do you have to work with through the HELOC? There are some turnkey options where you can force appreciation but they are higher capital requirements.
Above is my experience for refinancing my turnkey properties. Because you are paying "full retail" for the turnkey property you'll only be able to refi from 70 to 80% LTV and you won't be able to fully repay the HELOC back. I'm newish so my experience is limited