All Forum Posts by: Sean Salandy

Shaun Weeks thanks for the reply. What you say makes sense especially if it is a commercial bank that would sell off the loan anyway. Chris Simmons thanks for your reply as well. I am planning to keep my HELOC and just pay it down as I refinance each rental property. I was most concerned about the bank that would be giving me the actual mortgage for the rental property. My initial thinking was that since they are in business to make money on the interest I pay over time, I thought they might think it wasn't worth it to do business with me if I would only be keeping the mortgage for a short amount of time.

I am planning to purchase rental properties by using a HELOC on my primary for the down payment. The goal is to then refinance the new rental property after about 6 months then rinse and repeat. My question is, would the original bank that I used to purchase the rental property, frown upon the fact that I am refinancing after such a short period of time? Would this lead to them no longer wanting to approve a mortgage for me in the future?

Just to follow-up, I found out today that the bank will not allow me to take out the loan solely because of my plan to use it to purchase real estate. So the application was denied. The loan officer couldn't give me a better explanation other than that it is their policy. I guess the best option is to not be so forthcoming with my plans to use it for RE purchases.

What's interesting is that I initially went to prequalify for a conventional loan for a single family investment. To my surprise the loan officer told me I would need a commercial loan and the best I could get was a 5 year ARM. Then it was actually her suggestion for me to consider taking a loan out on my primary home. Now, they aren't sure if they can make the deal because of what I want to use it for. It's a local bank and the person I spoke to was the branch manager but she didn't seem too knowledgeable about the loan process. I'm wondering if I try using a different bank and just tell them I'm using it for home improvements, would the call the loan if the found out somehow that I used it to purchase another property?

That is a good question. I will ask that if they deny my application. It's strange because Wells Fargo told me the same thing.

I noticed most applications for home equity lines ask you for the purpose of the loan. I currently have a pending application for my primary home which I currently own free and clear. I was honest with the bank by letting them know I plan on using the funds for real estate investing. So far the banker is saying they may not want to do the equity line because I am using it for other real estate. They would however be ok with me using it for home improvements or vacations, etc. My question is, do you have to disclose the purpose of the line of credit? Should I have just told them it was for home improvement?

Well said. Thanks for the response.

Could he also try to refinance the rental property at some point (let's assume there has been an increase in value) and take out some extra cash to pay back his primary equity loan? Potentially freeing up these funds to make a down payment on another property? Assuming all of the numbers still work in his favor.

Thanks for adding on to the discussion Dorothy Templer and everyone else for that matter. Matt Devincenzo , my original intent was to receive help in brainstorming the structure of my investment business along with a property management entity that I would like to grow simultaneously. I agree that part of my original post is related to setting up separate entities but with a focus on how to keep ownership information as private as realistically possible. At some point I would like to have the property management entity reach a level to where I will have employees that will interact with the tenants. At that point I would rather not have a tenant be able to knock on the door of my home for whatever reason. Maybe the idea doesn't make sense. That's pretty much the reason why I posted to begin with. To hear different opinions. In reading through your response I can see how the eviction process would require the owner's information to become public. Again, this was intended to be a brainstorming session and maybe it turns out that I shouldn't attempt to mask my information. Either way thanks for the response.

I think it is safe to say eviction is part of the business of being a landlord. While it is true that you should be optimistic about having a low tenant turnover rate, I think it would be naive for me to not prepare for the worst. I commend you Johann Jells for only having one eviction in 17 years and would hope I have a similar experience.