All Forum Posts by: Brandon Beardt

Are you trying to purchase a secondary home? A new primary home? Or a rental property? You can get a HELOC and draw a specific amount that you need for a down payment on the next property. If it's an investment property you're trying to buy, you'll more than likely have to put down 25%. If you're trying to pull more equity out to have access to even more funds, another option is cash out refinancing your current house, and using those funds to drastically expand your portfolio (use to purchase multiple properties) assuming that's your goal of course.

Hi Jose, just curious, what's your reasoning behind wanting a HELOC as opposed to getting cash-out financing?

 Hi Riggie,

Similar to the other responses, I think it will be difficult finding a lender who would do a HELOC on an investment property. All the investment lenders we work with don't offer that. A cash-out refinance will probably be your best bet in this situation. But what do you need the funds for? Also, there are many different types of financing options you can go with. Don't hesitate to reach out, always here to help.

 Hi Irving,

Great question! What's your reasoning behind wanting FHA financing instead of conventional financing? Also, utilizing a HELOC for a down payment is perfectly fine, but have you considered just cashing out some of the equity in the property with a cash-out refinance instead?

Hi Dakota,

I'd say the best answer to your first question is: IT DEPENDS hahah. A rate and term would definitely lower your monthly payment and put more money in your pocket each month. A cash out refi will give you the cash you'd need for the next property (if you don't have it already) and you'd could probably get a rate that's less than your current 6.5% (though, monthly payment will increase because there's a new higher loan balance). If you have a decent amount of equity, I'd go the route of taking that cash out and using it towards the purchase of the multi family you're trying to get (if you can handle the increased monthly payment, of course). All in all, & I don't know your whole situation, I'd say a cash out refinance will help expedite your journey faster than a normal rate/term.

For your second question, any loan officer/broker you speak with should be able to run through your current situation and provide you with a cost benefit analysis for different loan options and lenders. This brings me back to your first question, in that everything DEPENDS on you and your goals. As loan originators/brokers, it's our job to understand you and what you're trying to accomplish in order to match you with the best lender that suits you and your needs. Brokers have the capability of running your scenario by many different lenders and can easily navigate which programs make sense or don't. In addition, they have access to wholesale pricing, which blows retail out of the water. Banks usually have only a few options, which is why savvy investors generally work with brokers.

Don't hesitate to reach out with any more questions you may have.

Hi Justin,

Congrats on investing in your first rental property! Deciding on a type of financing depends on a variety of factors but it mostly depends on your situation and goals for the property. Are you trying to purchase? If so, how much do you have/ are willing to put down? Do you have enough for reserves? Short term or long term rental property? Do you qualify for conventional financing or would you need to go through alternative financing (like NON-QM loans)? Etc, etc. Questions like these will play a huge role in finding your answer. Conventional financing usually has better rates/terms, but can be difficult to qualify for with some investors for various reasons (Debt to income ratio's, FICO, etc). As of late, we're seeing a lot of activity in DSCR loans, where qualification is simply based on if the property cash flows (Monthly Rent > Monthly PITI). These types of loans are big with investors who can't qualify conventionally and don't want to provide income verification docs (make little income on paper), and they also have 30 year amortization which is huge. Hope this helps! If you have any questions, don't hesitate to reach out. Good luck!