All Forum Posts by: Chris Teti

A cashout REFI or a HELOC are both good options. As Jonathan said the HELOC will have a higher interest rate, but you also aren't paying any interest if you aren't using it. So I guess the question would be how long you plan on using the $$. If you expect to use it for another property and pay back the "loan" over a few years, the REFI is probably the better bet. It would keep your costs down (especially right now) so you can cash flow higher and pay it off quicker.

Another route you can go is to utilize the Infinite Banking Concept to push the cash into the policy to kick start the compound growth and then borrow against it to buy the house. It'll allow you to have your money working double time for you.

First, thank you for your service. The above are all good options. I don't know much about VA loans, but I'm assuming you are asking b/c you don't have enough cash to put down a larger down payment? If this is true there are other ways to finance a deal. For example business lines of credit + HML/Commercial mortgage, things like that.

Hi @Connor Cushman, it really varies based on your credit and the types of lines of credit that would be a good fit for your situation, like how old is your business, revenue, personal credit profile, etc etc.

I recommend an unsecured business line of credit (or multiple lines). It'll keep your personal credit clean and once you are done, you can use them over and over for other projects. 

Yes, definitely a question for an accountant. For this project my opinion is it won't matter either way. An LLC will flow right into your personal anyway, so it will be taxed the same way. Other types like S-Corp and C-Corps are handled differently. That's my understanding anyway. Might be different in your state, but definitely talk to your accountant about it.

I prefer to use unsecured business lines of credit and have my HELOC as a backup. If the HELOC is on a residential property, as the balances go up, your DTI will be negative affected.

I'm not accountant, so you should definitely speak to one. Especially if you are going to be getting into REI, you'll want a good one with experience working with investors. Your friend will probably 1099 you to write off the profits he paid to you, which means you will have to pay taxes on the profits you received from the deal.

Hey Harry, I don't know what the rest of your credit looks like, but there may be way to move some of your existing expenses into your business to clear up some of the debt in your personal name. This will improve your DTI and might allow you to get approved.

Hi Chris, HELOC is a decent option as you aren't paying interest if you aren't using it. I prefer a HELOC as a backup option. One negative if the HELOC is on your primary residence, is that as you start using it, it will negatively impact your DTI (which may or may not be an issue for you, but something to consider). I prefer to use unsecured business lines of credit as my primary gap funding option (even over cash assuming the #'s work) and use the HELOC as a backup plan.

Hi Marcus, I would recommend a business line of credit over a personal/heloc so there is no impact to your personal credit. Interest rate really depends.

What I prefer is using the business lines of credit for your gap funding (closing, downpayment, holding, etc) and the heloc as your backup plan in case you need a little extra.

Agree, that's the goal is for 100% fund the deal with bank money and be able to refinance long term to pay everything off into one mortgage.