All Forum Posts by: Jerryian Francois

Hi Jerryian, 

2 years to repay for a Heloc is very short--most of the ones I originate come with 20 or 30 year payback terms, with 3-10 year draw periods where you can take out and put back money as many times as you'd like. I would recommend checking around to make sure it's the best you can get. Feel free to reach out with any questions!

John

Hi Jerryian, 

Yes thats a great strategy to get into flipping. Is this duplex your primary or is it an investment? Reason I ask is because Helocs have different terms depending on the property occupancy. Usually lenders allow you to go up to 70% LTV on investment Helocs but for primary owned properties you can go up to 90% LTV.

First thing is to figure out which category best fits your scenario. Then you have to see if you have enough room to use either or. One way to know your value is by using a virtual appraisal and if it comes in too low then you order a full appraisal to see if you can get a higher value. It will depend on the comps in your area. 

Do you have a deal ready to go? you will also need to time it correctly to know when you will need the money by. Theres many different terms for Helocs so its important to choose the best one for your needs. Theres 3 year, 5 year and 10 year draws. These are just a few things to keep in mind when using a Heloc. 

Hope this helps a little but more on how Helocs works. Everyone scenario is different. Happy to connect if you wish to discuss further. 

@Albert Bui @Matthew Kwan

I would personally conduct a side-by-side comparison between a HELOC and hard money, and then proceed accordingly.

I would say it depends on the terms and rate the loan. How much money is expected to be made from the flip? 2 years is plenty of time for a flip especially if it is mostly cosmetic. What kind of rate do you have with the HELOC and how sure are you about this particular flip? Have you worked with this contractor before? There are a lot of questions but these are things to consider to see how much risk/reward is involved

@Jerryian Francois

So, guessing little to no equity to cross-collaterailze?

@Jerryian Francois

Yup, that's a usual tough one.  At first glance, at best this might be where you have to go to the private lending market.  Do you have any other properties that can be cross collateralized?

Yes I have another duplex but I recently purchased it with FHA