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.
Thanks Deren! Sounds like a good deal!
Using the same strategy with my "live in flip" so I don't have to pay PI when I'm not using the equity.
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.
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.
Originally posted by @Steve K. :
I just cashed out refi my latest BRRRR with 4.25% APR, fixed 30 yrs. @Deren Huang or @Peter T., 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?
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).
It doens't need to roll off the tongue if it works. Pictures look great, well done!
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