Mid Term rental on primary in San Diego?

Question

Didn’t see a thread for midterm rentals so using the short term thread.

I have a portion of land on my Primary residence I will be putting a ADU on for mid term rentals to traveling nurses and college students.

My initial plan was to use a Heloc to finance this project but my concern is since it is on my primary residence I will not be able to refinance and pay the Heloc off like in a BRRRR deal and use the Heloc for further deals? Unless that is possible?

I also would like to avoid a cash out Refi since my current rate is 3.25.

What are your thoughts for a rookie investor?

Andrew Garcia · Answer

Hi @Jordan Ray, you are correct in that you cannot refinance the ADU itself.

However, you can refinance the entire property. At that point, you run into the issue of getting a higher rate.

The best way that I can see you doing it is to HELOC and then do a HELOAN at the end. It would be a fully amortizing, fixed-rate second lien that does not pay off the first lien so you keep the low rate. Granted, you would need enough equity for this.

That would be my suggestion. Let me know if I can be of any assistance.

Twana Rasoul · Answer

refinancing your primary in San Diego in that scenario would be a cash out refinance.

Mid Term rental on primary in San Diego?

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