Rental strategy advise needed

[Account Closed]

Hello everybody I’m new to this and I would want some help any advices are welcome.

I recently bought a house as a primary ( for tax reasons) even though I'm staying at my wife's house. I'm remodeling -renovating the house so I can rent it when it's ready. (I'm a contractor) My plan is to get a HELOC using the house I just bought ( it's paid off) put it under an LLC after, rent it and use the HELOC money to purchase the next one.

Does it sound logical ?

Am I gonna have issues if I get a HELOC and then rent it out ?

What would you advise me?

Thanks in advance

[Stephanie P.]

Originally posted by @Account Closed:

Hello everybody I’m new to this and I would want some help any advices are welcome.

I recently bought a house as a primary ( for tax reasons) even though I'm staying at my wife's house. I'm remodeling -renovating the house so I can rent it when it's ready. (I'm a contractor) My plan is to get a HELOC using the house I just bought ( it's paid off) put it under an LLC after, rent it and use the HELOC money to purchase the next one.

Does it sound logical ?

Am I gonna have issues if I get a HELOC and then rent it out ?

What would you advise me?

Thanks in advance

 Your post raises significant ethical questions.

You say you bought this house as a primary, but you're going to rent it out.  If you say you live there to get a lower tax rate on local taxes, but you don't live there, that's tax fraud.

If you go to a bank and apply for a HELOC after you tell them that it's your primary and while they're underwriting it, they find that you're living with your wife in her house, you'll get turned down. If they close it and find that you weren't living there, that's mortgage fraud.

The way to do it is to tell the truth.  This is a non-owner occupied property that's free and clear.  Well done.  Once the property is stabilized (meaning your renovations are complete and you have a tenant), refinance it and take cash out and then go get another one.  Do the same thing.  If your taxes show no income because of LEGAL deductions, you won't be able to get conventional financing, but there are numerous no income verification loan products out there.  You can get a 30 year fixed in the 6's without having to provide your tax returns.

Best of luck

Stephanie