Best Use for Heloc's??
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!
Could be great for flipping!
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.
Arbitrage for private lending!
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.
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!