All Forum Posts by: Erik Salmon
Erik Salmon has started 1 posts and replied 3 times.
Post: Which option should I use for financing my first deal?
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Quote from @William Sing:
I think HELOC would probably be the best choice for you right now. With rates increasing a refinance will most likely not make sense. If you can use that HELOC to then buy another primary residence and rent out your current property it would be an option. If you are looking to do just an investment loan (25% down) then it will be a bit harder and longer for you to get to that.
Also not sure what your strategy is but keep that in mind!
That you for the response! I thought about using a HELOC as a down payment on a new house and keeping my current as a rental but I would really like to put my equity to work and update my current house as needed. I really enjoy the BRRRR method and I am wondering how I can put money down with a HELOC and finance the Rehab.
Post: Which option should I use for financing my first deal?
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Quote from @Ben V.:
Hey Erik,
Welcome to BP!
You have several options for funding your first deal since you have equity in your home. I don't know what you are trying to do though...fix and flip, long term, short term...so forth.
1. Pull a HELOC out and use the funds to purchase a small home with cash. You'll have a paid for home with instant cashflow.
2. Pull a HELOC out and use the funds as down payment for a fix and flip, use the remaining funds to rehab the property.
3. Pull a HELOC out and use the funds to purchase several properties using DSCR loans. That one is a super one and I love the DSCR loan. Get's you going very quickly.
4. You have more options but I think that is the ones I like the most.
Hope that helps! I'm a mortgage loan officer specializing in first time home buyers and residential investors.
If you are wondering what a DSCR loan is I wrote a short article on it. Check it out - https://www.biggerpockets.com/...
Thank you for the great information! I am already approved for a DSCR loan and a HELOC. My goal right now is to use the BRRRR method so a thought I had was buying a house in cash and financing the remodel with a loan. Would I be able to do this with a DSCR loan if it is not "rent ready"
Post: Which option should I use for financing my first deal?
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I am just beginning the process of getting into real estate but I am having a hard time deciding how to fund my first deal. I have built up some equity in my primary residence and have investments to cover a down payment as well. I was wondering how I can put the equity in my house to use. I have been looking at a Refinance or HELOC. The one thing I am wary of is a second mortgage on my home with a heloc. I am open to any other options as well.