All Forum Posts by: Han Jaewon

@Caroline Gerardo Thank you so much for the comprehensive advice! Your practical tips are incredibly helpful. 

And thank you everyone for taking the time to share the valuable guidance with me!!

Thank you for the valuable advice! I will definitely look into the options you mentioned, especially the details about the first lien cash out, and the bank you mentioned.

Thanks for your insights. I've noticed some appealing deals through wholesalers, which requires cash/hard money only, which is why I'm keeping that as an option alongside exploring MLS listings with a traditional loan. We're targeting properties around the $300k mark, and with the banker at PNC indicating a possible HELOC of up to $480k, my thought was to leverage the HELOC for an all-cash purchase. The plan would be to then refinance shortly after to pay off the HELOC and secure a traditional loan.

Based on your experience, do you think this approach is a reasonable way to proceed?

@Jay Hurst Thank you for your advice! I didn't know rental income can impact DTI. I appreciate your time and guidance :D

Hi BP community,

I'm seeking to purhchase the real estate investment, and need some advice on financing options. 

My Situation:
- My spouse & I own two properties worth $600k, $200 fully paid.

- Our combined after-tax income is $170k annually.

- We have no outstanding mortgage debt.

Recently, we discussed financing options with a banker at PNC and learned that we might qualify for a HELOC up to $480k, albeit with a relatively high minimum interest rate of 9.31%. Our plan was to use this HELOC to secure off-market deals from wholesalers and then pursue refinancing.

Concerns and Seeking Advice:
However, I've read discussions, indicating potential challenges in refinancing when a significant portion of DTI is tied up in a HELOC.

Given our situation, I am keen on understanding:

1. Is using a HELOC for purchasing and then refinancing a viable strategy, or does the impact on DTI make it less feasible?

2.  If you have navigated a similar path, what strategies or precautions would you recommend to mitigate financial risks and ensure a smooth refinancing process?

3. Are there alternative financing methods we should consider that align well with our financial standing and investment goals?

I appreciate the shared knowledge and experiences on this platform and look forward to your valuable insights.

Thank you!

Hello BiggerPockets Community,

I've been looking for the investment rental properties on platforms like New Western, Zillow, and Redfin. I've noticed some appealing deals on New Western, but they require purchases to be made in cash or via hard money loans. As I'm trying to approach this with a solid strategy, here's where I stand and what I'm contemplating:

1. Home Equity Line of Credit (HELOC): 

My spouse and I own our primary residence outright (no mortgage) and have spoken to a banker at PNC. We were informed that we might be eligible for a HELOC up to $480k with a minimum interest rate of 9.31%. The plan allows switching between fixed and variable rates for a fee of $100. However, I'm wondering if this is a competitive deal in the current market, and would love to hear your opinions and experiences.

2. Investment Strategy - Using HELOC for Immediate Purchase:

I'm considering using the HELOC to purchase a property, especially those available through wholesalers like New Western, which require immediate cash payment.

My strategy includes refinancing the property later with a traditional loan to secure a lower interest rate and more stable long-term financing. Is this a feasible and commonly practiced strategy? Any pitfalls or success stories would be greatly appreciated.

3. Investment Strategy - Using Traditional Loan:

For properties listed on Zillow, Redfin, and similar platforms, I'm leaning towards securing a traditional mortgage loan, assuming these purchases don't demand the same immediacy as the off-market deals.

4. Tax Implications:

If I use a HELOC for purchasing a rental investment property, is the interest eligible for tax deduction?

I am eager to learn from your experiences and insights. If you have suggestions, alternative strategies, or any advice on navigating these options effectively, please share. Your guidance will be invaluable to me as I embark on this real estate investment journey.

Thank you for your time and help!