All Forum Posts by: Michael Jiang

Please PM me the details. 

Welcome!

Hi BP!

I just applied for a HELOC at a major US bank and it turned out they can only offer me a ridiculously low 20% LTV...Here is my situation:

1. I own a house (primary residence) which is appraised by the bank at $2 million. It's all paid off, no mortgage. 

2. I have a W2 at a startup and the income is not decent at the moment. ~150k annually. 

3. I have excellent credit score (790+) and other assets including properties, cash, stocks. 

4. I wanted to get a HELOC for 1mm for a new development. I was originally told it should be do-able at 50% LTV. However, now they are telling me they can only give me $400k due to my income.

Is this common? Shall I try another bank?  

Thanks! 

Ideally I would like to set up a s corp to protect me from liability, but I think the self-employment tax is a killer of profit...

I was wondering if I only do 1-2 projects per year, do I still have to pay myself a salary and thus the SET? I have a full-time job, and the flipping projects do not take much of my time (I have an realtor friend who looks for potential projects, and a contractor who does all the work). 

I've been doing some research online and I understand flipping houses under personal name is not a good idea because of liability if something go wrong. 

However, from tax perspective, it seems to me flipping houses under an llc or s corp pays more tax due to self-employment tax. Is that correct? 

Thanks in advance.