I’m looking into acquiring a STR property using equity in my current home to cover the down payment.
I’m early in shopping for equity products and the best quotes I’ve gotten so far:
– $120k HELOC: 7.7%, $7k fees + full draw at close
– $120K HELOAN: 8.1%, $3.5k fees
Are these the best out there right now? The fees and terms are high enough that it feels like a mistake to get them without a property already lined up because of how much interest I’d be paying from the outset.
I’ve heard of the idea to get a HELOAN and immediately move the funds into an interest-bearing account, but even that I wouldn’t want to just let ride for too long.
Looking for advice on how to go about this to minimize cost/risk as a first timer.
Realistic HELOC/HELOAN terms for acquiring first rental property?
byu/jetwildcat inrealestateinvesting
Posted by jetwildcat
5 Comments
[deleted]
$7k in fees is crazy for a $120k HELOC. Usually the best HELOC terms will be from banks and CU’s. Have you checked with who you currently bank with to see if they offer HELOC’s?
Third federal.
Why aren’t you exploring the options with a bigger bank that should likely have better rates and no cost options? I’d also explore HELOC options with your local credit union–many offer no app fees, no closing costs and no annual fees. That would be your best bet although you may also be better served just getting a purchase loan for an investment property if you can qualify.
If your in a state where Regions Bank operates they have HELOCs with no closing costs or fees up to 250k