How do I use investment property equity to buy another

[David Almendarez]

I own a single family home and its an investment property, how do i use that equity to get another rental if i have bad credit? whats the best kind of equity loan for this HELOC? Cash out refinance ?

[Scott P.]

Visit banks and ask, and let them know what you mean by "bad" credit.  They'll give you some initial responses.

In my area, a bank that is interested if working with you to earn interest by loaning you money will have you apply for the loan and pay for an independent appraiser from a long list of approved appraisers, to estimate the value of your SFR. They might also have you pay an application fee. In my area, on a rental property the banks I've worked with will loan 70% of the appraised value. So if my paid for rental appraised at $100,000 they bank would loan me $70,000 either all at once as a re-mortgage or as I needed it from time-to-time as a HELOC.

I've done the re-mortgage/cash out as well as the HELOC. I tend to favor the HELOC unless I've identified my next property and I know I want all the $ at once. In my experience the rate is lower on the HELOC but it can change/be variable while the cashout/refi/remortgage can have either a fixed or variable rate, whichever I prefer.