All Forum Posts by: Christopher McConnell

@Justin Phillips

Thank you. That all makes sense. I am in Charleston SC. 

Thank you for the replies so far. This definitely gives me more to research as I am not as familiar with the pros and cons of a first position HELOC, but it sounds like that may be a good option for this situation.

• Based on @Justin Phillips recommendation, is primary vs investment residence not a concern when doing a HELOC like it is with conventional?
• If I am only interested in refinancing for the remaining loan amount is a HELOC still an option? Perhaps sharing my thinking on this will only disclose how unfamiliar I am with how a first lien HELOC works, but from the my understanding using the details of this scenario for a first position HELOC I assume I would be requesting a loan amount equal to what I owe or up to 80% of the value?
• Will having a HELOC impact my approval for a conventional loan for my new primary residence?

I am currently researching lenders in my area so hopefully I'll find someone else to pester with these basic questions. 

I am interested in using my current primary residence as my first step into building a rental portfolio as it is on a good trajectory of increasing value and I have a desire to relocate to another area. I am considering renting out my primary residence and purchasing a new primary residence, but I am unsure of the best path to do so or what challenges I may encounter.  The details are as follows:

1. -Current residence purchased ~4 years ago for $300k with a conventional 30Y fixed
2. -I have ~$280k left on my mortgage, paying $1900 per month
3. -Current market value assessed at $440k
4. -I estimate I can rent the property for $2500 a month

Current plan:

1. -Complete refinance of current primary residence (Objective: obtain lower rate and monthly mortgage payment, remove PMI)
2. -Move into a rental property as a temporary residence
3. -Rent out my previous residence
4. -Purchase and move into a new home 
5. -Move rental property into an LLC with the intentions of continuing to add investment properties in the future

Areas of concern

1. -When I complete my refinance, what do I need to look for in my new mortgage to ensure I don't have any issue converting that property from a primary residence to an investment property and then deeding it to an LLC?
2. -When I apply for a mortgage on a new primary residence how will my rental property impact my approval? (I anticipate a net positive cash flow on the property but will likely not have more than a few months history of it)
3. -I plan to be able to cover the down payment and closing costs for my new primary residence with available cash, but am considering taking cash our during my refinance, or use a heloc after the the refi to leave my cash reserves available for other investments.