How to access equity for flipping?

[Sheila Gonzalez]

Hi everyone

I have a question I hope someone can help me with.

We own and live in a two-family house in Queens NY with about 500k in equity. I would like to buy 1-2 small houses to live/flip and rent out both the apts. in Queens.  We have about 78K in CC/personal loan debt. I applied to borrow 230k Equity loan from a credit union, but they want a statement explaining what the money is for -other than paying back the debt.

Some of it will be for updating this house (there’s not much left to do) however, when I mentioned to the loan processor that we also want to buy another 1-2 houses to live in/flip, he said that that would be considered riskier and there would be more scrutiny -so we might not be approved for that much. Some of the paperwork said that if the money is for home repairs/updating they need written estimates. I don’t know how to go about this.

Should I exaggerate how much the repairs/updating are? Is it OK to say the funds are for just spending/trips/cosmetic surgery etc?

I thought that saying it’s for investment it would not be a problem at least it’s not to waste on junk. It would mean a significant increase in income since that would be his FT job. (He only works PT in a low paying job right now). If he could flip 3-4 properties a year (at 30K each) we would double our income.

How do other investors that are just starting off access equity from their property?