HELOC advice

[Zena McCoy]

Hello BP community,

I discovered this site a few months ago, I love the podcast, however, this will be my first post. There seems to be a lot of very experienced investors on this platform. So I thought I would ask for your advice. I currently own a duplex in the Magnolia area of Seattle. I have no plans of selling it, I hope to develop it one day but I am in no rush since it makes a nice rental with positive cash flow. What I would like to do soon is buy another investment property probably in Tacoma. I am thinking my best option would be to get a Heloc on the duplex. I owe about $260,000 on it but it is valued at around $650,000. However, when I went to apply for a HELOC at my local credit union for $100,000 they denied me saying my "debt to income was too high". My income the past 2 years has been low since I have been only working part time so I can take care of my 1yr old daughter. My question is what advice can you give me on obtaining a HELOC with my low income but descent equity?

Any advice would be much appreciated.  Thank you in advance. 

-Zena 

[Brian Moseley]

I have been in a similar situation before. One way other than increasing your income or decreasing debt might be to refinance with cash out option but your inome may still be a factor. Another option would be to find a partner in the form of a cosigner to off set the ratio or to invest funds under contract.

The parameters of the HELOC are relatively ridgid. There are some mortgage brokers who may offer some options but BEWARE. It is possible to be drawn into the abyss of empty guarantees and paperwork. Before you know it, a year and thousands of dollars have gone down the hole and suddenly, they just can't do it. Find a Credit Union that offers loans on real estate and join. They will offer the best rates / terms. Good luck!