All Forum Posts by: Ana Marie B.

@Edward B. - Thanks! Appreciate your points and analysis. Will likely move forward with the HELOC.

Thanks @Craig Naylor!  Good look to you as well.  :)

@Alexander Felice - Hi Alex, Yes Home Equity Loan and Home Equity Line of Credit (HELOC) are differ. Main difference is Home Equity Loans are fixed rate with typically higher rates than HELOCs which are variable rate. The former is like a 2nd mortgage where you get a lump sum and payments are set for around 15 yrs or more. The latter is more like a credit card where you only pay back what you use (with interest of course).

Hi BP!  My husband and I live in the SF Bay Area where home prices have risen substantially in past years.  We want to leverage some of our home equity and use that equity as down payment for our 2nd rental prop.  We're thinking of drawing ballpark $50-70k.  

We contacted Wells Fargo Bank and a local credit union for ideas on interest rates. Seems like HELOC rates are much lower and so we're leaning toward that direction. Also both banks provide the opportunity to switch to fixed rates at a later time, granted we keep the HELOC open for at least 3 yrs.

Wondering if any BP members have done something similar? Pros/cons of HELOC vs. regular home equity loan for using as down payment on a rental prop. Thanks in advance!

Hi, @Arianne L. - Time is money when purchasing real estate.  

With that being said, has there been a pattern of poor or slow communication from this realtor(s)?  Typically 24-48 hours is a reasonable response time.  However, if there is a pattern of poor communication from this agent, then you certainly have the right to part ways, unless you've signed a contract to work exclusively with this team (some agents require this) then you need to address that before moving on. 

I was in a similar situation when purchasing my recent income property.  The realtor had great Yelp reviews and gave a fabulous initial consult.  However, things went downhill from there -- his communications were not detailed, he provided no timelines (we were out-of-state investors), and it took him 48+ hours to respond to our most basic emails.

I made the difficult decision to part ways and it was the BEST decision we made.  Our mortgage broker referred us to an excellent realtor who met our needs and efficiently got the job done.  Hope things work out for you!

Thanks @Steve B. and @Arlen Chou.  Yes, if we build this cottage/bath with full permits, it would indeed increase the value of our property, which is a major plus.  

@Tyler Bedle - You also bring up good points about the amount of work that we would have to put into an Air BnB operation. We certainly value our privacy which is why we want to build a bathrm next to the cottage, as we don't want the guests coming into our main residence for any reason. I see you're in Florida. If we decide to purchase an SFR in your area, will definitely hit you up. Thanks again.

Hi BP! My husband and I own and occupy an SFR in the SF Bay Area. With real estate prices so high around here, we're unwilling to invest in another property until this bubble bursts. Therefore, we're thinking about the following options --

A.) Build a cottage/bath in our backyard (w/ full permits) and use it for short-term rental via Air BnB. Cost of construction would cost around $40-50k. We live 15-20 mins from SF and have bus/train stations close by.

B.) Put that $ toward another out-of-state investment (leaning toward SFR).

Curious what your thoughts are. Thanks in advance for your input!

Great thread! I can imagine a lot of newer investors facing similar issues and concerns. Thanks for posting this @Holly N. and leaving yourself open for constructive feedback. 

@Rohit Kochar - I see this post is a bit old, but just in case you're still wondering -- Even if you make a larger down payment, you will still need to locate and pay for home insurance.  

Thanks @Derrick Craig!  Glad to be on here!