What do you think about this Scenario? Talking to Lender tomorrow

[Michael Dunn]

I just want to run by my current financial situation, and get other's thoughts on what I can Expect to hear from my Lender tomorrow ..... More than likely 

My Situation:

I can not qualify for another loan ( Investment Loan ) , do to my DTI already being around 33 , and the Max being 45

So qualifying and getting approved for a $50,000 loan is a no go ( I was told this, from two different Portfolio Lenders in my area )

Soooo, this Leaves me at Looking to ( Most Likely ) get a HELOC via the Equity from my Primary

I'm assuming a LTV of 80% for the HELOC , which would give me around $22,000

Now, with $22,000 , this kind of puts me in a quandry, in that I really can't buy an Investment Property outright 

Well, I MAY be able to qualify for upwards of $26,000 - $28,000 IF I use my VA loan, to refi into , as I can get a Higher LTV with the VA

The reason i say a MAX of $26,000 - $28,000 , is that I can't qualify for more than this amount ( Even though I have $40,000 of Equity ) in my Primary .... Due to my Income , and the MAX on the DTI at 45% ,..... $26,000 - $28,000 is looking like the most I'll be able to get

I may then can do something with this amount , as there are a few Very Distressed properties in my area that I have been keeping an Eye on ..... Once I know I have access to the Cash at any time I need it via a HELOC, I'm going to submit in the Owners Mailboxes , the " Cover Letter " as mentioned in the " Driving for Dollars " thread , that is here on BiggerPockets.

If I can qualify for say $27,000 , and use the $6,000 in cash that I have saved up ...... I may can get this Property for $30,000 ( an ALL-Cash ) deal to the Owner(s) , which will hopefully look appealing to them, since this property has been vaccant and in a Distressed state for over a year now .  I can Put in the Letter.... " I can Offer you an all Cash Offer, which means , No:  Realtor commissions, no repairs and no closing costs "

Then use the Other $2,000 for an Appraisal on my Primary to get the HELOC , and the Closing Costs ( $1,000 or so ) ? Or is there NO Closing Costs with a HELOC ?

Just wanted to share what I'm going to run by my Lender tomorrow , but wanted to get other Member's advice and take on what I can expect to Hear , when I call Lender tomorrow

Thanks so much