Home Equity Line Investing
Are there any restrictions on using a equity line
of credit on my resident home to finance purchasing investment real estate property? Are there any advantages to using a second mortage vs
a equity line of credit for such investing?
thank you
None that I know of but is an expensive way to go considering the interest rate on helocs and need a min fico of 620.
None that I know of but is an expensive way to go considering the interest rate on helocs and need a min fico of 620.
An equity line which you set up so you can draw as you need and which has no cost once established until you use it. The interest rate is standard and you set that with your bank. Thats why you deal with them, you are a customer and entitled to the best rates and costs. If my bank would not play we just might tell all of the investors we advise to pull their Certificate of Deposits out of the bank. They better give a good interest rate on the Equity Loan. They pay so little interest on the Certificates the threat to withdrawl 20 or 30 is more then enough to insure a good equity line.
Banks work over those who have no clout. So my theory is use the clout as needed. Somebody has to do it. Besides it is fun. A Certificate of Deposit which is usualy $100,000 each just sits there drawing hardly any interest until the Investor wants to put it to use. Then he draws it out and you use the money paying him a negotiated interest return.
I never threaten the bank, I just borrow the passbooks say 20 or 30 and wave them in front of the loan officers face as I make my request for an Equity Line. Just watch those beady little eyes going to and thro looking at those passbooks.
Lucius 8-) 8-)
Whose passbooks did you use? Can I rent them by day? if done that way, wouldn't that be a new biz?
Quote:
On 2004-03-17 21:15, sandiego wrote:
Are there any restrictions on using a equity line
of credit on my resident home to finance purchasing investment real estate property? Are there any advantages to using a second mortage vs
a equity line of credit for such investing?
thank you
Sandiego,
The advantages depend on what you plan on doing with the property. If you are going to keep it, sell it, what condition it is in, ect. These answers would help you way out the financing choices that are best for you.
Lori
[addsig]
i used my equity line to buy my first investment, loan on new prop and pay off equity line and ready for next deal to come down the pike.