Borrowing against my primary residence, HELOC?

[Jarrod Willis]

Background: current flipper and landlord with a partner, wanting to invest some solo. I have about $250k in equity on my personal residence. I would like to either 1) purchase a rental property myself or 2) Purchase land and build my next primary residence. 

I can’t get a typical investor loan at the moment, so my two options currently are:

1) Discuss with my private lender who I have my loan with on my current residence about taking $$$ out against my house, raising my mortgage balance with them. Using that for either of the two options above. Would raise my primary mortgage pmt to about $3500 a month.

2) Getting a HELOC on my primary residence, making IO payments, totaling about $2800 a month for my current mortgage + IO HELOC

3) "Paying" myself a lump amount out of my joint LLC and not borrowing against my house.


if I went option 3, that $$$ I give myself would be taxable income. If I went with option 2, my IO payments (for the draw period, typically 10 years) would be tax deductible. Option 1 is my least favorite choice because of the increased risk on my personal property (loan being in first position, raising payment significantly)

i do plan on selling my current primary residence in about a year, or sooner.