All Forum Posts by: Chris Barrett

You're going to end up paying a lot more interest on a heloc than a 2nd mortgage, if you intend on holding that debt for more than a couple years. 

It's actually harder if you are currently living in the property, want to cash out, and then have it as a rental as you haven't proven to the bank that the property will cash flow $600 a month on top of the NEW mortgage costs. 

1. Do you need this place to live in, or can you rent it out and have somewhere else to live?

2. Is the 75k from your DTI restraint from the bank? You have a 200k equity buffer, so you should be able to get closer to 130k from a LTV perspective - but will your rent amount cover that new loan?

2. If you can rent it out, get it rented out, get a year lease, then start approaching commercial lenders for either a DSCR loan or a 2nd mortgage, with cash out.

Personally due to the rate environment, I am sitting at 65% LTV on my properties, but I also stopped buying and started private lending (in the US at least, I just bought a house in Portugal).

You're in a really good position here, it'll just take some math, homework with banks, and diligence in renter underwriting to end up with a fantastic income property and portfolio. 

I certainly hope people weren't refinancing to go on vacation :-D But you would refinance to get the cash needed to buy the next property. It doesn't work as well now because it's hard enough to be cash flow positive with prices + rates and where rents are at. 

Wow only a 16k loss is honestly a huge win in that situation. 

I'm using my SDIRA for PML. 

Did you finance 100% of the $115k with the hard money lender? If so, you were never going to be able to refinance out of that without putting some cash into it. 

Yeah interest rates currently make it really difficult, as houses are often cheaper to rent than to pay the mortgage + taxes on. You might be better off not trying to house hack into a whole new house and either look for a duplex where you can rent half of it out or just look for a project house that you can get a DSCR loan on.

Just make sure to find a lender you are going to refinance with first. Holding onto a HELOC long term is painful, so you'll want to make sure your exit from the HELOC is planned out.

I've used Lifeproof from Home Depot, it was a little bit harder to install due to it's rigidity and thickness but it's extremely durable and easy to clean. No underlayment was needed, but the floors have to be pretty flat for an easy install. 

Agreed with Mike. But to the OP, you're comparing two different things with different risk profiles. Comparing IRR of two different "products" isn't as helpful as comparing IRR to two different properties, for example.