First Investment using HELOC

4 Replies

Hi, I'm looking to start investing, I have $230,000 in equity in my home and $20,000 for down payment.  What are some options in using equity?  For example, If I was purchasing a $150,000 investment, do I use the entire 150,000 of equity for the purchase or do I use my equity for just 20% down payment?  Any examples of how others started?

Congrats on starting out @Armand Duvio ! It is your choice and depends on your strategy and goals. If you want to BRRRR the property, flip it or use equity/cash to invest in someone else's deal. You have enough equity to put in a cash offer and then within 30 days do delayed financing to get your cash back out and pay off the HELOC. If you want to purchase using a conventional loan then 20% down will work. It is just that a cash offer (using your equity via a HELOC) will be a more attractive offer to a seller.

I've been studying up on this BRRRR strategy and I think that is the direction that I want to head into. So, I have 2 options to make my first rehab purchase a) with 20% down using equity or b) using 100% equity to buy outright. My last credit check was 819. Let's just say after rehabbing I'm in the +20K range. Looking towards the future for a 2nd purchase and so on, which is more advantageous? a or b and why? I appreciate the responses guys!!! thanks.

Also, I'm in my early 40's, so I kind of see myself a late starter and investing in just a handful of properties, wouldn't get me to far, because if I had 30 year notes on each one, I'm looking at the my 70's before having any noticeable income coming into play. That's why I like the BRRRR investing cashflow strategy.