All Forum Posts by: Kerry Baird

Good to know.  Interesting that WaFd coverage includes the elusive Texas.  Wonder if they offer HELOCs there.

That’s a great looking house!  In what part of the country is it located?  I wonder whether there were any builder concessions?  Will you be using the same company to do another house?  

We did something similar when we were stationed overseas with the military, and we bought a new duplex because we didn’t want to have maintenance issues while so far away.  The property was managed and we were new at real estate, so preferred having property management at the time.  The house appreciated and the debt was paid down and that launched us into other investments when we finally did sell.  

Well done~

Hello and welcome to BP.  I want to let you know that there is a short term rental forum, where you can chime in on things that have worked for you, or ask questions of folks who have similar successes and challenges with STRs.  Are you looking to do another one in the future?  

Nicely done with the owner finance purchase.  Why were the sellers leaving this property? How much renovation are you planning on doing?  

A house is a basket full of commodities, and all the parts inflate at different rates.  Or the dollar devalues, to be more precise.  Add in demand for the land itself, increase in the younger generation aiming for household formation, in-migration to Florida from retirees or from other relocations, and your observation is spot on.

This is very uncommon, though I see folks posting about HELOANs for investment property. If you could do it differently, owner occupied is easiest to get a HELOC on and has the lowest interest rates. If you planned on moving out of a house and buy another property, as an example, you could pull a HELOC before you moved out and keep it as an emergency fund.

Investment properties prove to be more challenging, but not impossible when titled in your own name. Once an LLC is in the situation, it is a whole new world.

Best places to look for a HELOC are often the small community banks and credit unions close to the property. My favorite source is Navy Federal for its long draw period of 20 years, and Figure for its fast funding. High credit scores and low DTI are often required…and these take much longer than I first thought…Navy might take 45 days to get through the gauntlet. Some, like the last one we got in place, used a drive by estimate of value rather than a full interior appraisal. We also used PenFed, and they offer a fast HELOC…not sure how long they are now, but the process was smooth. Just not for an LLC.

@Bob Asad, it is vastly easier to obtain a HELOC on an owner occupied residence than on a rental. So, after the consideration you give to @Jason Wray recommendations, complete any borrowing before you move out.  

@Clay Hall, I like a HELOC on my primary residence as an emergency fund, and wish I'd had that extra money when I got started, simply as reserves. We moved into fixer houses to renovate and then moved out and turned the house into a rental. Once the renovation is done and the house is put back together…that's a great time to get a HELOC and just leave it open.

Moving a house into an LLC has several unintended consequences, as you have noticed. Financing requirements change a lot.

Borrowing from my primary so I can buy another rental, which is also borrowed money, is a fools’ errand…creating an “alligator” right at purchase and putting my own house at risk. 

@Clay Hall,

It is much easier to get financing on a house that you will be occupying, because of risk to the lender.  This includes HELOCs or fixed second mortgages, which again are easier to get when titled in your own name.  

Rental houses in your own name will be harder than an owner occupied house, but you may find a HELOC or fixed rate line at a local community bank, a credit union.

Once you title a house in an LLC, you have to change title to yourself and back again. Or you have to look for commercial or DSCR mortgages.

This may mean that people on one side of the wall at your local bank (in the residential lending) might have no clue that they have a product on the other side of the wall (in the commercial lending side).

It can be a challenge when we pay off a house to get money back out of a house. 

@Devin James, thanks for taking the time to answer.  I look forward to seeing the build make its way to completion.