All Forum Posts by: Dustin Stubbs

My main question: Is it common to have origination fees associated with a Fixed rate HELOC on an investment property? It would be first lien position (rental property valued at $285k and has no mortgage). 800 credit score and great income/debt and here's what a lender has for us:

MAX HELOC Draw: $211,403.00
30yr 8.95 $1678.00 1.99 orig. fee (appx$4,000.00)
30yr 7.95 $1575.00 4.99 orig. fee (appx $10,000.00) 

Back story for my post:

Our only need for the HELOC is to have temporary cash in the event 3 more rental property purchases (under contract) close near the same time. I'll give a short background:

We keep having to push closing back on two of the three properties. Property 1 is still in probate so closing date is unclear but supposed to be very soon.  Property 2 is a bank owned closing that is going on 15 months now! Property 2's bank foreclosed on the incorrect parcel so they are getting that sorted out still.  We keep having to push both closings back to allow time for the sellers to clear up.

Property 3 just became available which is a great deal but I don't have the cash to float all three closings 'at the same time'.  If they close a little further apart from one another, i can likely not need any loan product as all 3 deals are cash purchases. 

I could do a REFI on the first mentioned $211k home (valued at $280k) and likely have a better rate. However, I don't really need $211k+. It just seems that a REFI's closings costs would be close to the HELOC's 1.99% origination fee. I certainly don't intend on choosing a 4.99% orig. fee to buy the HELOC down 1%.

Are there HELOCs for investment properties that don't have orig. fees.... or perhaps smaller fees?

TIA

I appreciate the comments from everyone.

Is there a legal way to use S-Corp pre-taxed income to acquire more real-estate? 

I have an S-Corp (construction company) that is providing a main source of steady income. A couple years back I was able to acquire a commercial property for the business. This was setup under a separate LLC. Now days the business has fairly low debt. I am debt free in my personal life.

Having increased cash has me pondering on more ways to invest but also how to reduce tax liability. 

Other thing's I have considered but not fully researched are:
Invest pre-tax S-corp income into the stock market (EFT/REI's).
Acquire more commercial property directly through the S-corp.