HELOC in my house to buy a property

[Alvaro Leis]

Hello,

I’m new to this only own three rentals, but have equity in my house that I want to use to buy another rental or two, I read a lot of articles about doing that. When i asked in a Facebook group of investors for bank recommendations one person just told me “do not mention the bank what you are planning on doing” I thought myself why? I thought this was a common strategy for investors to buy more rentals I asked her why did she say that and she didn’t reply so I’m asking here, should I go to a big bank? Also , should I tell them what I’m trying to do with the money? Once approved and when you are ready to use the money, do you need paperwork to proof what you are doing with it or you just write a check of swipe a card like with a traditional credit card??

[Will Fraser]

Hi @Alvaro Leis, the hesitation comes from this: when lenders know that money will be used to buy real estate their brains start whizzing and popping and screeching with things like "lien position" and "Debt to Cost" and "DCR" and they start getting really granular. This doesn't fit the mold of the versatility that a HELOC is traditionally known for, which is probably what the investor gal from the FB group was hinting at.

If you can get through the HELOC process without showing your cards then that's cool, but it not necessary.