We apologize, but the forums are closed for new posts. Click Here To Join The Unemployables Facebook Group

Welcome, Guest. Please login or register.
September 26, 2021, 01:20:56 am
Home Help Search Calendar Login Register

Welcome, Guest. Please login or register.
September 26, 2021, 01:20:56 am
Home Help Search Calendar Login Register

Author Topic: use a heloc to start??  (Read 3128 times)

Offline kimesha

  • Member
  • **
  • Posts: 82
use a heloc to start??
« on: March 02, 2005, 11:22:29 am »
i have about 35000 of equity in my current home. thought i could attempt to get a heloc. i will use this to get my 20% down payment to avoid pmi. get a mortgage to finance the other 80% with the intention of renting it out. use my heloc for any neccesary repairs. only thing is my credit score is 640. is this too low for a heloc?
i can make excuses or i can make money but i can't do both!

Offline Mr.fancypants

  • Member
  • ***
  • Posts: 135
Re:use a heloc to start??
« Reply #1 on: March 02, 2005, 01:06:31 pm »

There are a lot of different schools of thought here. I've talked with more experienced investors than myself and some say use HELOCS, some say don't. My gut feeling is that I am opposed to them. Here's why: when you take a HELOC out you're putting your primary residence at risk unnecesarrily.Another way to word it is, if there were more ways to get started buying rentals, other than using a HELOC, would you be willing to try them?

I feel like I might be speaking out of place, because I don't currently own rentals. I only fix and flip. But this year I am planning on buying a bunch of them. Here's what I am wanting to do. Instead of taking money out of my pocket, I want to use rehab loans to "get my foot in the door." Once the rehab is complete and I have a built in equity cushion, I'll refinance and turn it into a rental. If done correctly, this can be accomplished without providing a down-payment. So basically you're buying a house with other people's money, fixing it with other people's money and using the equity to refinance. It sounds good in theory, but like I said, I haven't done it yet myself. Try to read some posts by DaveT. He has been very helpful to me in explaining the rental thing. Good luck.
Work smarter, not harder!!!

Offline richmortgagebroker

  • Member
  • ***
  • Posts: 344
    • Loans 2 Investors specializing in your unique needs
Re:use a heloc to start??
« Reply #2 on: March 17, 2005, 06:47:43 pm »
When you use a HELOC you are putting your house at risk.

So if you choose to use your HELOC I would suggest that you do extra, extra due diligence on the properties you invest in.

You have to treat your HELOC as would a HML or as a private investor which means separate your self as if you are a HML or PI that way you are training your self as if you are these entities and you get good experience protecting your collateral and limiting your risk

I would ask HML or PI how they make their decisions and maybe even do an apprentice type of idea.  YOU will LEARN ALOT FROM THEM. :-*
« Last Edit: March 17, 2005, 06:48:14 pm by richmortgagebroker »
Craig and Laura Richins
National Loan Brokers
866-582- 4451 EXT 6743  Office

Offline niravmd

  • Member
  • ****
  • Posts: 596
Re:use a heloc to start??
« Reply #3 on: March 20, 2005, 08:37:50 pm »
i would rather use my heloc as an emergency fund. that
way if i get strapped for cash, i use it.

but i confess, in the past i have pulled out 16k from my 100k
equity to put 10% down on a rental.
but it was only a small portion of the equity  in my home.

it also makes sense to have 6 months living expenses stashed away before u start investing.

Make your investments work hard so you don't have to!

Offline Las Vegas Real Estate

  • Member
  • ***
  • Posts: 115
    • Las Vegas Real Estate
Re:use a heloc to start??
« Reply #4 on: March 21, 2005, 02:14:05 am »
What I would do is obtain the HELOC and rent out your curent residence.  Buy as many property as you can while saving a kitty for a rainy day.


SMF 2.0.15 | SMF © 2017, Simple Machines