Leveraging Estate Property

[Chris Law]

I am new to real estate investing. Looking for some help.

My parents passed away and left me their house. It is fully paid for and I currently rent it out. Because it was part of their estate, and I am the Executor and Sole Heir, I have not bothered converting the title from their name to mine. The house is appraised at ~$100,000. I would like to either take out a mortgage or a HELOC on this property and use that capital to invest in either other rentals or REITs. I have 2 questions regarding this:

1. Am I going to have to convert the Title over to my name in order to get a Mortgage or HELOC?
2. Do you think it is wise to use hard cash from the HELOC to buy other properties, and then recoup that capital once I finance the new property?

Does that make sense? Thanks - Chris

[Rick H.]

Welcome to Bigger Pockets!

In order to borrow, you will either have to obtain an administrator loan upon opening probate from a private money source (and at presumably higher rates and cost) or complete probate in order to clear title and vest in your name to obtain bank financing.

I have no idea what rates or terms to expect on a non-owner occupied rental. Most HELOC's are variable rate financing and terms cap around 15 or 20 years.

Rather than ask us what is advisable, why don't you learn what makes a deal for you, establish some criteria for your own and decide if having rentals is a good investment model or perhaps another mode (buy/sell, lending, wholesaling, etc.).

I'm always leery when people ask others to make their decisions or provide only generalized info. So that you don't get caught in that trap. Be kind to yourself, give yourself a little break and work on the education part by reading RE books, discussion forums, etc. then you'll know better what avenues are right for your situation.