Again, the rule is: Within one year, the appraised value or cost of acquisition (plus costs of improvement), WHICH EVER IS LESS.Refinancing an investment property is alot harder than an owner occupied, getting cash out will be like pulling hens' teeth, IMO.

If it forecloses the HELOC gets squat as if your lucky there will be enough to pay off the first if that.If they work with you they get a payoff to release the lien interest as a short sale.The key will be what the first mortgage will or will not do and what they will allow junior lien holders to get as a payoff in a short sale.Typically they offer junior lien holders 1,000 and then the juniors want 30 cents on the dollar.It is a negotiating process of back and forth.If you are in a fast foreclosure state a first isn't going to give juniors a large chunk of the purchase price when they can foreclose and get almost the full balance owed to them.Ideal situation would be for HELOC to accpet 10 to 20 cents on the dollar and write the rest off.Before signing anything make sure the HELOC is not just releasing the lien interest for 20k but forgiving the rest of the debt in writing as well.Do not believe anything that is not in writing.I have seen banks lie through their teeth before saying they would not pursue a seller after a short sale for a deficiency and the letter was to come from another department higher up.They closed and the letter never came.

It's not just Dodd-Frank or the SAFE Act, but these Acts have put teeth in compliance requirements, but there are other issues as well that are of more concern.

Unless you have something in writing notarized and certified then it has no teeth to it.If the city wants the land they could perform an abuse of power with a higher use buyer wanting to go in and make it difficult for them.

Median Prices Edge Lower in SeptemberI know as a real estate broker, the stereotype is that I should be wailing and gnashing my teeth and crying "OH NOES!".  

Why don't you get a white enamel touch up pen and touch up the chip?

I gave up on short sales in Calif because there's a law regarding 'Purchasers of Equity' with real teeth in it, so the business of intervening in foreclosures in Calif is very risky.Count the cost before you begin . . .

I think shiny things just look nicer..cars, phones, appliances, teeth..you get the idea. 

We need to make a decision on this one soon, then if need be get back out and see some more properties.I will follow up once we get off our asses and decide what to do here, and will be sure to include $ amounts for each phase as well.So far, this experience has certainly proven what I've read to be 100% true - the learning/planning is the easy part, gritting your teeth and taking the initial plunge is much more difficult.

The LOI is simply an understanding between the parties, it can be structured to have teeth but that beyond the scope of this question.An option when executed properly invokes an equitable interest in the property and depending on how it's written can force a sale should the seller later have a change of heart, file bankruptcy, or die.