Buying & Selling Real Estate Discussion

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Brandon Elliott
  • Realtor
  • Erie Co
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Best Use for Heloc's??

Brandon Elliott
  • Realtor
  • Erie Co
Posted Nov 21 2022, 09:25

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!

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Frank Avallone II
  • Lender
  • Morristown, NJ
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Frank Avallone II
  • Lender
  • Morristown, NJ
Replied Nov 21 2022, 09:28

Could be great for flipping!

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Kerry Baird
  • Rental Property Investor
  • Melbourne, FL
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Kerry Baird
  • Rental Property Investor
  • Melbourne, FL
Replied Nov 22 2022, 10:28

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.

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John Williams
  • Property Manager
  • Clarksville TN (clarksville, tn)
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John Williams
  • Property Manager
  • Clarksville TN (clarksville, tn)
Replied Nov 22 2022, 11:43

Arbitrage for private lending!

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Allan Smith
  • Rental Property Investor
  • Nashville, TN
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Allan Smith
  • Rental Property Investor
  • Nashville, TN
Replied Dec 7 2022, 04:03

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.

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John McKee#4 Commercial Real Estate Investing Contributor
  • Investor
  • Fairfax, VA
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John McKee#4 Commercial Real Estate Investing Contributor
  • Investor
  • Fairfax, VA
Replied Dec 27 2022, 17:59

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!