All Forum Posts by: Ernesto Hernandez

People will argue til they're blue in the face on Turnkey versus Rehab and those people never take action. The diet that works is the one you actually stick to.

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Rentometer.com and Zillow are both pretty accurate. Layer in Craigslist and see where those three sources land you.

As you get VERY serious about a deal, reach out to a prospective property manager.

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I always appreciate your insight Chris. Also, it was great meeting you at the SF Bay summit.

With that said, I just do not understand why the bank I want to HELOC with is literally avoiding my e mails for an explanation.

That's the infuriating part but the objective feedback in this post has been valuable.

Thanks everyone.

1 Vote

Didn't do 10 banks, called about 5.

The terms of this bank were far better than the others and beyond what I was expecting.

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I did shop for multiple mortgages at once to minimize the impact to my credit.

Equity was determined via their own estimates.

Value of primary is $480-$500, of which about $50k has been paid down since purchase.

I do not legally claim it as a rental but have years of checks to confirm payments to me for mortgage.

$500 cash flow is AFTER financing and all expenses (maint/capex/management/vacancy). Otherwise, it's $2350 as of now.

Refinance of 3 rentals has now been approved.

Originally posted by @Joe Splitrock:

@Ernesto Hernandez just a couple things that jumped out at me:

- You mention that you own a primary but you don't live in the property, so it is actually not your primary. You live in the rental, so that is your primary residence. This could figure into your numbers, because it appears you are paying rent and a mortgage. Unless you are claiming your mothers payment as rent (which you legally should do), but if you are not doing that, then as far as they are concerned you have two residence. They have access to your bank statements and taxes, so you can't really hide this.

- You started the refinance process for three properties at the same time you were applying for a HELOC. Applying for multiple loans at the same time can be a red flag.

- You mention $250K equity in your primary. Was that equity gained through mortgage pay down or is it only market appreciation? Was the value determined via appraisal? It matters because the bank may not see the same value you see.

- What is the total value of your primary? For example, if the property is worth $1M and you have $250K equity, taking out $125K would leave you only 12.5% equity. Very often for HELOC you cannot tap below 20% equity or more in some cases. My HELOC required I keep 40% equity in the property, but doing that reduced the cost of my appraisal.

- Others touched on this, but you mention $500 cash flow on three properties. Is that the cash flow based on owning them free and clear or after refinance? Has the refinance on the thee properties been approved?

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Thanks Mike. I have inquired for an explanation as to why I'm a risk/ not a good candidate as a customer and specifically some reasoning from an underwriting prespective.

It just really upsets me that they stopped following up and weeks later, I was the one that had to probe for a decision.

I will follow up and see what their response is, escalate if needed and clearly articulate the numbers for them to see my liability and cash position.

$500 is not a lot on 3 rentals but that's because I did the BRRRR, with the intention of recuperating all of my cash or close to it rather than plunking down 20% per house.

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I rent two hours away from the primary. My mom lives in it and covers the mortgage. Would be too far a commute so I rent where I do. I have checks from her going back years confirming her payments to me.

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I have followed up. Awaiting a response.

@Tchaka Owen My income is strong relative to my expenses. I rent and my GF and I split the rent. I pay $900 in rent, nothing. DTI is not a concern.

The units I already own free and clear will produce a combined $500 in cash flow combined, after ALL expenses.

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Hey everyone,

I own a primary near where I rent, and have about $250 in equity. Of that, I applied for $125K.

I have 3 rentals that I own free and clear in Indianapolis. I begun the mortgage process for the Refi portion of my BRRRR's on those at the same time I applied for the HELOC.

My credit is 740+

My credit card utilization is sub 10%

I have $10K in checking accounts and another $25k I could cash out of a brokerage account tomorrow if needed.

Anything I don't know that would be resulting in me getting denied for the HELOC?

Thanks in advance.

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All Forum Posts by: Ernesto Hernandez

Ernesto Hernandez has started 50 posts and replied 382 times.

Post: A Turnkey Review: TCS Investments

Post: My First Deal: Cashflow vs Equity

Post: When calculating property ROI, how do I estimate rent per month?

Post: HELOC Application denied. Why?

Post: HELOC Application denied. Why?

Post: HELOC Application denied. Why?

Post: HELOC Application denied. Why?

Post: HELOC Application denied. Why?

Post: HELOC Application denied. Why?

Post: HELOC Application denied. Why?