Considering a HELOC for first but and hold, good or bad idea?

Question

Brent Coombs · Answer

If you're going to wholesale, why would you need finance? Your end-Buyer is paying for it!

If that sounds too simple, it's because: it is.

If you reckon you can find deals that are suitable for wholesaling, those SAME deals should be suitable for buy&hold with your HELOC and new mortgage combination, and paid for by rents!

If calculations show it won't cash flow - look elsewhere. The USA is a big country! Cheers...

Account Closed · Answer

@Drew Oesterle what aspects of wholesaling have you become adept at? I'm just getting started out here in CO myself (Wholesaling) and am putting together a lead generation strategy right now.

Why don't we work together at some point?

Diedrick Z.

Bill S. · Answer

@Drew Oesterle the property has to pay for itself (HELOC, 1st mortgage, and all other costs) or it's not an investment, it's an alligator. Alligators eat you. Not only do you have to drive for dollars but you have to actually contact the owners in some way. Calling or knocking on doors is relatively cheap if you don't have money for mail. The odds are low but with persistence you might get a deal. Once you get a deal then you have some funds to ramp up your marketing.

Just having a list is nothing, you have to actually contact that list. That's where the rubber hits the road.

Drew Oesterle · Answer

Diedrick Z, I would love to be able to work with someone. I'm in the Parker area and have been driving for dollars and have a small, but promising list. I have pretty much just been researching now and trying to talk to people. I have a lawyer lined up for transactions. I'm getting hung up on financing mailers. I work a full time job right now and it's a job that I will never quit for personal reasons, but doesn't pay great. Let me know if you would like to grab lunch sometime and discuss options.

Craig Pfeifer · Answer

You have to look at the cash on cash return on any investment so if you are buying a good deal, then it should be able to pay for the HELOC as well as the conventional loan.  You may not have as much cash flow if you are doing a no money down deal, but you will be paying down the HELOC which will provide additional back-up financing in case a major expense comes along.

Considering a HELOC for first but and hold, good or bad idea?

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