Can I get a Home Equity Loan to purchase a rental property?

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So, that way I could use some money to rehab around the property rather than getting a mortgage loan. The rental properties are usually ranged $ 30K to $ 50K.


The Economy: a diagram by Eric Danielson

Economic WTFs

• WTF #1 – On the left is the guy who earns ,000/year. He’s told he can get a loan for 0,000 with no interest for 3 years and as a down payment. He doesn’t even need to prove his earnings! He buys a house for 0K.

• WTF #2 – 3 banks purchase the loan (from left to right) and all three take out insurance on it from AIG, even the banks who sold it up.

• WTF #3 – On the lower left is the guy who also takes out insurance on the loan, even though he doesn’t even OWN it.

• WTF #3a – The guy on the lower left will eventually be fired from his job at the bank on the right, but still get an big bonus and healthy severance package comprised entirely of taxpayer dollars.

Meanwhile, the guy on the left is laid-off stops paying his mortgage and his home is foreclosed upon. All of the loan holders want their money from AIG, which is over-leveraged and doesn’t have it. Time for a bailout!

Multiply the guy on the left by 3 million and now the banks don’t have enough capital to loan ANY money…even to each other! Time for another bailout!

Finally, on the far left is grandma, who had her pension invested in Wall Street and has seen it’s value drop by half in 6 months. Her dividend checks no longer cover the cost of her meds, so she stopped taking her blood pressure medicine.

The End?

  1. Reply
    April 29, 2011 at 9:30 pm

    done all the time
    I am a mortgage banker in TN & KY

  2. Reply
    Ed Atun
    April 29, 2011 at 9:36 pm

    . You can do this if you have $ 30,000 in equity. Dont make your offer until the money is in your bank account. Many 2nd loans have been cancelled with no notice. The banks are tightening up.

  3. Reply
    April 29, 2011 at 10:21 pm

    Hah! I was doing a google search for my email + my name and somehow it came up with this, which has neither, but does have a picture of my whiteboard.

    Which is kind of scary, really.

  4. Reply
    April 29, 2011 at 10:41 pm

    Hi, I’m an admin for a group called Economic Clusterf*ck (a.ka. Recession) of 2008-9, and we’d love to have this added to the group!

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