All Forum Posts by: Jin Zhang

 You're way ahead of me in this process! Will definitely talk to a few lenders to identify those who are more comfortable with what I'm trying to do. Thanks heaps for sharing your experience and hope your refi goes smoothly! 

Thanks for the insight. So the lender will be more focused on property B's income producing ability, rather than the HELOC on my primary home. BTW if they only count 75% of the rent income when calculating SDCR, then I'm likely to be cashflow negative in their book.

I've heard people using cash from a HELOC on one property (A) to buy an investment property (B), then immediately do a cash-out refi on B and put the cash right back to the HELOC on A. I'm planning to do that, however I am just wondering whether the HELOC on property A (debt-free primary home in my case) will negatively impact my ability to get cash-out refi on B (an investment)? I am worried the unpaid HELOC plus the new mortgage would tip me off the DTI ratio. It looks like a bit of a catch-22: I can't paid back the HELOC unless the lender gives me the cash-out refi, but I can't get the refi unless I pay off the HELOC? How did you get to utilize the equity in your existing properties to invest in more?

I've seen several posts talking about having a positive cashflow using the Rent minus All Expenses calculation. Personally I find it hard to imagine I'd be out of pocket $8,000 a year even knowing the rent is paying $8k to 9k in principal  (which is not an expense), leaving me a positive cashflow (but I could only realize it when I sell above certain price). If I'm out of pocket only a couple of grand a year (still with a positive cash flow on paper) then I'd feel more comfortable and resilient, but the numbers I give above aren't that far-fetched in the hot market today even putting 20% down. 

What are your take on this when you evaluate a potential investment property? Am I just out of touch with the reality, not looking in the right area or the right types of properties?