Multiple Properties Same HELOC, How to Handle?

[Adam Rosenbeck]

Hello all,

Looking for a little guidance on how to handle my up coming situation. So I am new to the Real Estate world but I took the first (and biggest) step and am under contract for my first STR closing early November! Super excited to get it going! I am going into this venture with a business partner, he is the boots on the ground guy and is networked with all the right people, and I am providing the capital to get things rolling via a HELOC on my first mortgage. Our plan is to use my HELOC to fund the down payment, closing costs, minor refurb items, and furnishing the STR. All in all were estimating about $30-35k to get this up and running. Once we get it running were going to take all profits from the STR and pay back the HELOC as quickly as possible.

Where it gets interesting is I have around $90k available in my HELOC. So we will have around 60k left in this HELOC will be enough for 1 or 2 more STR's similar to our first. Our thinking is once the first house has the HELOC fully paid back we will then split the cash flow 50/50. The issue that I need help with is my HELOC monthly payment is 1% of my balance, so its always changing. Example, if my first property consumes $30k of my HELOC, my payment will be $300 the first month, then the balance might be $29,800 after that payment, so the next month's payment will be $298.00, and so on. BUT our plan was to put all profits towards the HELOC, so one month it might be $300, the next might be $1,000 so principle paydown will be ever changing as well. Throw another property in the mix and now my HELOC balance might be $70k, with two different properties both paying varying monthly amounts towards their respective balances, that ultimately lump into one larger P&I monthly payment.

I tried to get the bank that my 1st mortgage is through to allow me to have multiple lines of credit against it so I could have a HELOC for each property and keep it straight that way, but it was against their policy to do so. That would have been the easiest and cleanest way I believe.

So with all of that said (hopefully it makes some manner of sense), how can I keep track of each property's true balance and when each property has fulfilled its debt to the HELOC and we can start splitting the cash flow 50/50. It feels like I should be able to use a couple amortization tables and keep track of each property separately in one excel sheet, but I'm not 100% sure how to set that up to be accurate.

Thanks in advance for the insight!

Adam