Best Use for Heloc's??

Question

Hey everyone! I recently made a post on one of my social media channels (Tiktok) about a Heloc and it blew up!! I am curious to see what actual investors here are using it for and how thier returns have been?

Mind sharing some wins here? Thanks in advance!

Allan Smith · Answer

Heloc should only be used for short term projects, ideally in the 6 month range. Use it as a down payment or even pay full cash using it, but make sure that property has an exit strategy ready to execute in less than a year.

not only is this good financial sense, it's also how banks judge your creditworthiness when they look at your heloc activity.

John M. · Answer

I used it for a down payment on a commercial property because the rate on a HELOC is actually cheaper than a traditional rate!  My Heloc is 5.99% and the Cap rate on the purchase was about a 7%.  Having access to capital with a click of a mouse is awesome when you need it.  If you don't have a Heloc run and get one now!  Remember that the equity in your house is dead equity.  Put it to work!

Kerry Baird · Answer

They can be used for buying "all cash quick close" properties.  And the funds can be used for rehabbing.  I like the aspect of not having to go get proper mortgages all the time, the closing costs are much reduced from traditional mortgages.  I called two local credit unions; one required a full appraisal while the other just used something like a desktop underwriting valuation.  I could use that to my advantage, as well.

The down side is that some banks have called lines in or reduced the line they offer.

John Williams · Answer

Arbitrage for private lending!

Frank Avallone II · Answer

Could be great for flipping!

Best Use for Heloc's??

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