All Forum Posts by: Jonathan Cooke

Thank you all for the super helpful advice. My views on the utility of a HELOC in our situation are confirmed.

Now, for the next part. One of our previous properties was purchased partially with a HELOC. We have ~6% rate on the mortgage and we converted the principal and adjustable interest HELOC that was at ~10% to a 15 year ~7% rate to help the cash flow. The property is much closer to cash flowing now. I was curious if there were lenders that would use the monthly income to calculate the value of the property for a loan to wrap it all up. We were able to more than double the rent and we fixed up the property. In doing so, we were able to get my taxable income down to ~0. If the house is underwritten for a loan using comps in the area it won't have much equity added. If the home is underwritten taking into account the improved income, it might have enough equity to put the majority of the mortgage and HELOC into one 30 year note. Are there lenders that do this?

My wife and I are debating on taking out a HELOC on an investment property we own to purchase another property. My problem with this is that it's already too hard to cash flow as it is without adding an interest and principal adjustable rate HELOC. Are there other alternatives for down payment capital that are preferred or are there interest only HELOCs for investment property? The property has equity we can tap IF the lender uses income to evaluate the property value. I'm not opposed to 2nd mortgages or switching our current mortgage to another provider if they evaluate the value using the income the property generates. Thank you in advance for all lender suggestions and product suggestions. I'm sure I left out details necessary so don't be afraid to ask.