Please poke holes in my Master Plan....

[Troy Brown]

Hello All,

I've recently discovered BP and can't peel myself away from all the information!

I've found it's a great place to get a sanity check for young investors like myself preparing or thinking about their next move, so here goes mine and i'd love to hear anyones thoughts. Especially if i'm missing something major here:

I currently have three properties:

3/2 Condo upside down (owe 90k)

3/2 SFH with ~60k Equity (owe 60k)

5/3.5 with ~110k Equity (owe 225k)

DTI ~40% +/-

I've found a quadplex for ~150k bringing in 2k/mo and want to make this my next move.

I've had my agent do some back ground work and it looks to have a pretty solid rental history with one tenant in place since '03. I've walked through 3 of the 4 units and was happy with what i saw. Certainly some cosmetic stuff but nothing major i can tell, will have full inspection before closing.

My plan is to pull a 90% HELOC from my primary residence of about 70k (terms are 1%/mo of total draw and currently 4% rate, id have to come out of pocket for appraisal) and put down 25% on the quadplex and use about another 10k if needed to spruce the place up a bit.

I get the feeling the place is being managed by a neglectful management company so i'd like to both get the place looking a little homier and get some loyal tenants in the other three units.

I hate to wait the 4 weeks my bank says the HELOC could take so im also thinking of putting in an offer with EMD and playing the clock to close the HELOC and mortgage around the same time.

My primary concern is that i may not qualify for the HELOC due to my DTI despite having a 750+ Credit score and about 6 years of rental income history. Could i use the potential cashflow of the quad to improve my DTI or otherwise sweeten my position?

Thanks for your thoughts!