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Md Kamrul Huda
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As a new real estate investor, is 100% borrowing risky?

Md Kamrul Huda
Posted

Since I don't have cash and I lost my job. I want to borrow from HELOC for down payment and want to borrow the rest amount from lander to invest on 10 single family residential properties to generate $1500 per month cash flow in Charlotte Metro area. Please advise whether it is too risky in current market conditions with approx. 7.5% interest rates. Thanks in advance.

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Erik Estrada
#3 Private Lending & Conventional Mortgage Advice Contributor
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Erik Estrada
#3 Private Lending & Conventional Mortgage Advice Contributor
  • Lender
Replied

Yes borrowing with no reserves, skin in the game, and no stable source of income is very risky. 

Have you planned for the risks? What if your homes don't appraise? What if you cannot payoff the HELOC? What if you cannot secure a tenant on time?

I don't want to be the negative Nancy, but you should consider multiple exit strategies before taking on huge debt and potentially ruining your credit.  

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