Using a HELOC to purchase a second home

[Jody Tims]

Hi there,

I owe 328k on a home in the hills Portland that recently appraised for 630k after a refi. Mortgage with tax and insurance is $1,760. I'd like to use a HELOC for a down on a home in a more suburban setting and rent my current home. A property manager said I could rent the home for $3,300 without issue. They seem to vet tenants very well. Rent at that price point more than pays for the home and all of the related costs and even gives me a nice cash flow. My wife and I will then purchase a new primary on our existing income.

I’m hoping the group can help me poke holes in this plan or help me with what I may not know.

Much appreciated.

[Tristin Crum]

@Jody Tims I was born and raised in Eugene and lived in Portland for four years, the only recommendations I have is to ensure you have an understanding of Oregon landlord tenant laws which are some of the least landlord friendly in the country and Portland landlord tenant laws which are even worse for landlords, I know quite a few investors in Portland and they do great on appreciation but the regulations that landlords face from the state and city are rough

I’d absolutely recommend a property manager because of the laws and regulations. I’d also recommend being careful with the 12 month contracts, I’d ask for them to prove themselves first, I know a few investors in Portland who’ve signed 12 month agreements and the management companies absolutely did not uphold their end of the deal, issue is the contracts tend to only allow you to get out in extreme circumstances

I had an investor friend who’s property management company only listed his property for rent on realtor.com, failed to list it anywhere else, the property was vacant for like four months because of the management company not doing their job and he still couldn’t fire them

I’d love to invest in Portland but the laws and regulations just aren’t worth it for me, good luck!