If you had 150k what would you do?

Question

I’ll try to make this short: my wife and I own a duplex that we did a live in BRRR (got the refi at 3.5%) and had owned an airbnb that we operated for 6 years but sold because the town decided to do away with them (very nice of them). So we’ve been doing this RE thing for some time but I still consider myself a newb.

My question is: we have an unused HELOC for 150k but the rate is 10% (harsh). I'd love to get back into a project but i have to say the market is rough right now as i'm sure you all agree. My thoughts were to find something to buy for cash and flip it so we dont have to deal with banks and REFI'ing into a horrendous rate. The problem is finding something under $150k to then use the extra funds for a reno is quite rare.

Also, we’re certainly outgrowing our duplex unit as we’re a growing family so finding something larger to move into wouldnt be too bad. Was thinking rent out our unit, do another another live in flip, live there for 2 years to avoid the tax hit, then sell it….

Anyone have any creative suggestions?  Or should we just sit and save and not use the HELOC for a project?  Not the worst alternative.

Thanks in advance

Joseph Bui · Answer

Not sure what markets you are targeting, but I've been doing BRRRRs in midwest markets for the last few years (Memphis and Detroit). All my projects ended up being less than 100k total. I work with a team on the ground that helps source deals, project manages rehab and provides property management. Happy to connect and knowledge share.

Kenneth Jenkins · Answer

Who are you working with in Detroit?

Michael Smythe · Answer

@Nick Causa you should speak with @Samuel Eddinger, who's in your area and does flips and PMC.

Samuel Eddinger · Answer

@Nick Causa - I'm local to central CT and invest/flip/run a property management company.  I also have used a HELOC to buy probably 10 or more properties and then refinanced to pay back the HELOC.  It is basically how I laddered to 20 properties.

I'd be happy to have a conversation with you about this.  If interested, DM me.

Nick Causa · Answer

I could sell it yes and there would be a lot more than $150 left over. Closer to 600k.  But then we’d need a place to live and were getting something over priced with a larger than 3.5% rate.

Bruce Woodruff · Answer

Since the HELOC has that rate, I would personally not want to use it now. Of course that would change if there was a screaming deal where the numbers absolutely positively worked.

My first house had a loan at 18% so the Int Rate alone is not a deal killer, but you gotta be careful because it will suck up your profits real fast.

Can you sell the duplex and free up $150k cash?

If you had 150k what would you do?

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