All Forum Posts by: Justin Phillips

Exactly, so you don't have opportunity cost of trapped equity, or the holding costs of cash-out. 

When closing on a Heloc, the lender will definitely want to ensure you can afford the interest payments at a max-draw. Sometimes they'll even run that stress test in a number of different interest rate scenarios. Additionally, lenders can add a lot of stipulations if they please. That's why some say they can't/don't lend to self employed, because it's a lot more work for underwriting. 
I believe Manohar's question was more curious on the impact of a Heloc with $0 balance when applying for a new loan. The Heloc won't impact DTI, but to your point when lenders are looking to get extra stringent, they may call that into question.

@Manohar Reddy Paduri @Dan Schwartz
An unused Heloc shouldn't have any effect on DTI. DTI calculation is your monthly minimum debt payments compared to income. Credit/LOC/Helocs with $0 balance have a $0 minimum payment. That's one of the many benefits of a Heloc vs a Cash-Out.
When qualification is there, I always recommend everyone have a 1st position Heloc on at least one of their properties. They help DTI, increase cashflow/flexibility, and have the staying power more similar to a traditional mortgage in a downturn. 

USA: We have the worst tenants/laws

UK: Hold my 6,000 Beers.

Are you looking for referrals, or just seeing what others are doing? 
Personally, I've set up a very specialized Heloc on my property. With these inflated values, it's a great time to lock-in access to equity. You'll just want to find one with some staying power, so it won't be closed when credit markets tighten. 
If you're looking for referrals, unfortunately I only know of providers in my states (CA/AZ/CO) but they're available in every state. Investment property providers are harder to find, but they're out there!  

Hey John, 
If a situation ever arose where you needed to show cash, you'd simply ACH transfer that money from you AIO checking account/LOC to a secondary bank account. Depending on what it's for, it may need to season, but that would be the way to do it.
You're onto a great strategy, and an incredible tool for your financial tool belt. 

@Brianna Tardi Northern AZ is really blowing up, especially on the STR side of things. Summer months are the busiest months, as everyone wants to escape the heat. You also have the fun novelty of cold/snow in the winter. I'm in Gilbert as well, and my family loves escaping up to Show Low. From what I understand, Show Low is a favorite for those coming up from Tucson with it's proximity.
I don't know Tucson very well, but if you were going to use it as a 2nd home you'd be able to get a loan for it as such. That will give you much better terms, and you should still be able to STR it out part time. 
It sounds like either one of those options would be a good possibility for you!

Welcome Kevin! You're definitely in the right place to grow your REI knowledge!
Your first step will definitely be finding which method(s) appeals to you most. Buy and Hold, BRRR, House-Hacking, STRs, Large Multifamily.
You'll want to be sure to run your numbers conservatively, especially in this inflated market we're in now. You'll find many helpful tools and strategies right here on BP. All the best! 

I have a buddy that works for Zillow, and their home buying/flipping is becoming a bigger and bigger part of their business. I don't love the idea of having a 25Billion dollar company being potential competition, but that's business today. Currently they're only in select markets, but I'm sure they'll continue to branch out.
On the bright side, it won't hurt values!  

From one finance nerd to another, welcome! You're in the right place, great info and community here on BP. I look forward to growing alongside you.