Down Payment Options (HELOC/Refi)?

[Mary Eubanks]

I am a Real Estate agent in the DFW area. We are wanting to begin our investment portfolio using the BRRRR method or via new construction. However, we need assistance in figuring out where the down payment will come from. Here is our situation.

We have two homes, our primary & a secondary at the lake we just renovated. We put both of these on a 10 yr mortgage at 2.35% interest. I was able to save enough money for a 10% down payment along with cash to renovate the lake house. However, real estate has slowed its pace and I'm not making hand over fist like I was last year, so we need to figure out where a 20% down payment & closing costs will come from. We have 5 months of savings to cover existing bills. We are finishing the furnishing stage of the secondary lake home so we can begin AirBnb to generate some cash flow. 

I talked to our local bank regarding a HELOC on our primary home that we have about $400K equity in ($750K value), but because we took out 10 yr mortgages, our DTI is too high to be approved for $150K HELOC. Is my only option to refi one of my mortgages to a 30 year or is there another option?

I appreciate your time!
 

[Sean Beksinski]

Quote from @Harrison Sharp:

Quote from @Sharon Cain:

Similar situation, except i just have my primary home at 2.45% 30 yr fix. I am in the DFW area also and was wondering the same thing, should i do a HELOC or Refi to help fund my first buy and hold? or keep saving and just wait? ......following.

I would not refi out of that rate right now, for your scenario based on the limited info i would try and go HELOC

HELOC is 100% the way to go.