collateral

[Manuel Gonzalez]

Hey everybody just wondering what do yall think about using a home as collateral  for downpayment  for a buy and hold. Pretty much in my situation one house can  can get up too 4 properties in my range. Im considering this cause im trying to build up my cash for  some flips or maybe a spec build this is a one man operation so cash preservation is important thanks

[Rick H.]

Personally, I'd use a credit card before I'd use my residence. That's actually how I started.

This actually accomplishes several things:

It keeps my home and the roof over my head out of harm's way.

It motivates me to peddle fast and hard to pay off debt.

The last economic crisis is littered with people who used their residences to fund their investment plans. If you do decide to go forward with this plan to use your home's equity, remember that most HELOC's are adjustable rates loans so making long term commitments with short term money can easily work against you. Also, this can cause big conflict if you own with a spouse.