First Investment Property Purchase Question

[Mike Colucci]

Hello everyone; I live in the Ft. Lauderdale area of South Florida. I'm looking to purchase my first income property, but as many of you know, things are expensive here in South Florida. I own a 2 bed 2 bath condo that I payed off, and I'm thinking of using a Home Equity Loan to purchase my first income property. Because it's my first property, I believe I should be looking for a turnkey operation due to the fact it would be the least riskiest situation for me. I would like my first income property to be a 4 unit multifamily property, but a quick look on Zillow reveals those properties are going for anywhere from $900,000 to $1.2 million, not really sure how feasible it will be to obtain one of these properties with a Home Equity Loan from my condo. I'm thinking I may need to step down to a duplex instead. Can anyone offer any advice on my plan?

Also can anyone tell me if there are any real estate investor meet ups to network with local agents, investors, contractors, etc?

[Jason Wray]

Mike,

Avoid the HELOC if your going to be buying a 4 unit in that price range. When I run approvals I use cash for collateral or DP and a HELOC will not count. The HELOC is a debt obligation and will be used as a DTI factor. Why add an extra "open end" trade-line and possibly affect credit when you can have that cash pulled from the primary and sitting liquid in an account. Using a HELOC you are going to be required to provide a statement where the lender will examine LTV/CLTV on primary and that can take a toll on total equity/collateral they use for the approval. To help you avoid delays right now there is a hold on anything 5+ units under $1-Million (They can be done but the rates are high) 5+ units and over $1MM all day long and rates are good! If you can stay around 1-4 Units is safe and rate are good under or over $1MM everything is still funding on time and rates are good. Just watch out for that 5+ under 1MM...probably until September. Let me know if I can be of any help...