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HELOC to Cash-Flowing Rental in 21 Days — Phoenix, AZ
$265K HELOC + all-cash offer on a $255K SFR. Closed in 3 weeks, rented in 11 days, cash flow pays 58% of the HELOC from day one.
Video walkthrough coming soon
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The Setup
Homeowner sitting on $370K of equity, 3.25% mortgage locked in 2021, watching Phoenix rental inventory and tired of waiting to 'save enough.' She didn't want to touch the first mortgage or drain savings. Goal: one rental property, funded fast, without killing her balance sheet.
The Starting Position
Borrower Snapshot
| Home Value | $680,000 |
| 1st Mortgage Balance | $310,000 |
| 1st Mortgage Rate | 3.25% — untouched |
| Total Equity | $370,000 |
| Available HELOC @ 85% LTV | $268,000 |
| Credit Score | 762 |
Step 1: WCL Digital HELOC
Soft-pull offer in minutes. No appraisal required at this loan size. Funded in 5 business days. This is the product that makes the rest of the strategy possible — it's how we access equity without disturbing the 3.25% first.
| HELOC Draw | $265,000 |
| Rate | ~8.5% amortized, daily interest |
| Term | 20-year |
| Monthly Payment | ~$2,300 |
| Funded | Day 5 |
Step 2: All-Cash Purchase
Target: $255K single-family in a stabilized Phoenix suburb, listed rent band $1,900–$2,000. We offered all-cash — no financing contingency, no appraisal contingency, 14-day close. Seller accepted at $253,500, $1,500 under ask.
| Purchase Price | $253,500 |
| Financing | All-cash (HELOC-funded) |
| Close Timeline | 14 days |
| Estimated Rent | $1,950/mo |
Step 3: The Cash Flow Math
$968/month out-of-pocket for a $253K cash-flowing asset. That's the real cost of admission. As the HELOC balance drops through amortization, the payment shrinks — by year 3 she's closer to break-even, and by year 5 the rental covers the full HELOC payment.
Monthly Cash Flow
| Gross Rent | $1,950 |
| Property Tax (1.1%) | −$234 |
| Insurance | −$130 |
| Maintenance (5%) | −$98 |
| Vacancy Reserve (8%) | −$156 |
| Net Operating Income | $1,332 |
HELOC Paydown Math
| Monthly HELOC Payment | $2,300 |
| NOI Covers | $1,332 (58%) |
| Out-of-Pocket Monthly | $968 |
| Annualized | $11,616 |
Step 4: The 3-Year Projection
By year 3: $45K of HELOC paid down, $24K in appreciation, and ~$36K of rental income collected. The credit line is partially recharged — ready to repeat.
HELOC Balance Over Time
| Month 1 | $265,000 |
| Year 1 | ~$252,000 |
| Year 2 | ~$237,000 |
| Year 3 | ~$220,000 |
| Property Value @ Y3 (3% appreciation) | ~$277,000 |
The Bottom Line
She kept her 3.25% first mortgage untouched, used $265K of equity without selling, acquired a cash-flowing asset in 21 days, and built a repeatable system. Total 3-year out-of-pocket: ~$35K. Asset acquired: $253K appreciating at 3%+ annually.
Illustrative breakdown. Real closed-deal details have been anonymized and numbers rounded for clarity. Rates, LTVs, rent estimates, and program guidelines change — verify with Chad before acting. Not a commitment to lend. West Capital Lending, Inc. NMLS #1566096 · Chad Villacorta NMLS #2636410 · Equal Housing Opportunity. All loans subject to credit approval.