Durham, NC · Member since 2014 · 104 posts · 68 votes
9y
I have a HELOC in my primary residence, line is $315,000 and is completely tapped out. I have bought 3-4 rentals with it. I am paying interest only (around$800/month) for the next 9 years then it switches to 1.5% of the balance (around $4,500/month). My rate is prime -0.25%.
Durham, NC · Member since 2014 · 104 posts · 68 votes
9y
No I don't, but my primary mortgage will be paid off right around then which is $2,500/month so it will really only be an extra $2,000/month more out of my $.
Investor · Owensboro, KY · Member since 2008 · 131 posts · 65 votes
9y
@Aaron Smith, You may want to read up on what Jay Hinrich has to say about using a HELOC for investment purposes. He's an experienced investor that made hard money loans to other investors that got caught with HELOC'S maxed out when the bank either froze or called the HELOC. It is a very real risk that you need to plan for. We utilize our HELOC for short term investment purposes also but have reserves in place in case the bank gets disagreeable. That scenario could cause some people a very real problem. Back to the subject line, rate on our HELOC is 3.75% and its not interest only. Cheap money true, but their are some downsides if things go wrong. Good luck in your investments.
Durham, NC · Member since 2014 · 104 posts · 68 votes
9y
My HELOC cannot be called due as long as I have made my payments on time. I have a 10-year draw period (interest only) and then a 15-year principal + interest repayment period (so a total of 25 years on the HELOC). This HELOC is an excellent tool for me to have increased my rental portfolio. I have 4 cash flowing rental properties from this HELOC. Also, if for some reason I don't want to start making that big $4,500/month payment in 10 years, I will just get a new HELOC that pays this old one off and starts me anew with another 10-year interest only period.
Also, at that point, I won't have a primary mortgage, so having a home valued at $850,000 (just appraised for this last year) and only a $315,000 HELOC on it is peanuts.
Originally posted b:
, You may want to read up on what Jay Hinrich has to say about using a HELOC for investment purposes. He's an experienced investor that made hard money loans to other investors that got caught with HELOC'S maxed out when the bank either froze or called the HELOC. It is a very real risk that you need to plan for. We utilize our HELOC for short term investment purposes also but have reserves in place in case the bank gets disagreeable. That scenario could cause some people a very real problem. Back to the subject line, rate on our HELOC is 3.75% and its not interest only. Cheap money true, but their are some downsides if things go wrong. Good luck in your investments.
Lender · Huntington beach · Member since 2017 · 21 posts · 5 votes
9y
2.5% interest rate from bof america. Prime -1.25 for credit lines over 100k for the first 12 months. The deal is good till the end of the month. If you need assistance please let me know. I don't normally post personal work items on here but its a good deal and worth exploring.
Whether you borrow from a HELOC or any other type of credit the risks are all (relatively) the same. As long as you keep pay the lender is usually happy with you never paying it off.