Real Estate Agent · Tulsa, OK · Member since 2016 · 408 posts · 242 votes
MMMMHHHHMMM Success story...
I love the BRRRR strategy, I threw in a little of my own flavor thanks to @Cain Wright. Instead of refinancing it, I will be getting a line of credit on it to use when I please.
Buy - 65k Thanks @Mark Turney for wholesaling it to me, always love working with you and Steph.
Repairs - 10,734 (ran into a couple problems, so I'll take it)
Rent - 940/mo (first person I showed it to)
Got a line of credit so I can repeat!
Only a limited amount of photos. I need to get better at documenting stuff.
Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
9y
I like doing this as well. You get to keep the same amount of cash flow on property #1, same rate and you're still paying down your principal. Meanwhile, the HELOC you use to buy property #2 gets paid off from the cash flow of property #2. You obviously have to watch rates rising (mine has gone up 1.25 points since I have used it).
I did this strategy 22 months ago. I am making my last payment tomorrow actually and the great thing is now I can use the HELOC again without going through the time and paper work of a CORF.
Developer · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
9y
I like doing this as well. You get to keep the same amount of cash flow on property #1, same rate and you're still paying down your principal. Meanwhile, the HELOC you use to buy property #2 gets paid off from the cash flow of property #2. You obviously have to watch rates rising (mine has gone up 1.25 points since I have used it).
I did this strategy 22 months ago. I am making my last payment tomorrow actually and the great thing is now I can use the HELOC again without going through the time and paper work of a CORF.
Denver, CO · Member since 2017 · 265 posts · 234 votes
9y
I just cashed out refi my latest BRRRR with 4.25% APR, fixed 30 yrs. @Deren Huang or @Peter Tverdov, other than the flexibility to draw/deposti/draw at will, why do you like the HELOC instead of the 30yr fixed? Am I missing something?
This is new to me, so not that much real data only head data. I actually only re-fi at a local bank so my terms are going to be terrible compared to yours. I would love to refi onto a 30 year fixed.
I don't think you are missing anything, just a different strategy.
One of the reasons why I thought this would be a good strategy for me personally was that, the first time I re-fi'd the chunk of money sat in my bank account for 4months at little to no interest.. no point for it to sit there when I was looking for the next deal. So I decided to keep it all in the house, then when I find a new deal, use the HELOC to then purchase the next house.
I just cashed out refi my latest BRRRR with 4.25% APR, fixed 30 yrs. @Deren Huang or @Peter Tverdov, other than the flexibility to draw/deposti/draw at will, why do you like the HELOC instead of the 30yr fixed? Am I missing something?
thanks
Flexibility to draw is the biggest one IMO. I can use it multiple times before it ends, also it looks much better on my DTI ratios that I have an interest only payment for 5-15 years whereas the CORF increases my debt side of that equation. Sometimes refinance can be good and sometimes HELOC is good. Depends on your strategy for each property. I rather keep my current cash flow and just have a HELOC that gets paid down rapidly vs increase my current cash flow for cash I can only use once (yes I know you can use that cash multiple times through multiple refi's).