HELOC Investing
Has anyone had any experience using a home equity line of credit to investing in real estate?
Has anyone had any experience using a home equity line of credit to investing in real estate?
Yes. it is a bit risking, but also is a cheap source of capital.
I agree with Ed. Use the first 50% or 60% of the available line to swing the deal. Use the balance as cushion in case something goes wrong.... it always does.
[addsig]
Get interest only HELOC on primary residence- cheaper rate anyway. After purchase/rehab, cash out refinance investment property with traditional 30 year fixed mortgage and re-fund your HELOC. Repeat as often as possible for 20 years (when the HELOC expires). Then get a new HELOC.
Chris
You can do a "cash out refi" FHA to 95% of the homes value and not take a "cash-out" hit.
Your profit from the sale is your sales price minus the basis and any expenses from the sale. The amount of money you owe on the property has nothing to do with it.
Chris
Ok so you still have to pay capital gains on the $85K
HELOC on primary residence.
Chris
I have more than 10 mortgages and Bank of America have me a HELOC on two of my investment properties. Because they were investment properties, the credit lines were capped at $100K and the combined LTV could not exceed 80%.
And, before you ask, yes the interest rates are higher than I might have been charged on a primary residence HELOC.
sounds like he is looking for birddogs to find deals, and he has investors on the other side, right? if so it, wouldnt it be in his best interest to have as many bird dog people as possible? sounds like he would want to pay you to sign up or at least provide as much info as possbile on forclosure s for free...
so if you have to pay, i would ask why
watch how highly you leverage yourself.
Not being able to cover the debt and loosing the property is how I see a lot of people fail.
Hi,
I agree about the debt this will generate. The idea is to pull enough to where they still cash flow or break even.
The question is, what is the best way to go about it?
Has any of you refinanced or got HELOC s, on multi properties at the same time? If so, how and where?
Thanks!
Quote:
On 2007-12-31 18:57, povrtsux wrote:
The question is, what is the best way to go about it?
Has any of you refinanced or got HELOC s, on multi properties at the same time? If so, how and where?
I have. I got two HELOCs on two different investment properties at the same time from Bank of America. Two applications submitted simultaneously and two separate closings.
Thanks for all the advice!
After rereading your post, I wonder how much equity you can really cash out of your investment properties.
If you are limited to 80% combined loan to value on a residential property, and only 50% on vacant land, how much cash will you really be able to pull out if you refinance each one? Will it be worth the costs of the refinance?
These days lenders are tightening even more and not going over 75% LTV on Stated.
That and the cost of refinancing would be a BLOCK.
This may seem too obvious and may be what you and Chris are already doing. Since you have a good size chunk of cash and you are buying at a profit, you can refinance your cash back out. This way your 200K will not diminish and you are picking up equities that cash flow.
I just started doing this on the East Coast and my refi loan should be ready in a few days. Instead of cash, I am using my HELOC for initial acquisition and re-hab.