Buying properties with a HELOC?

Buying & Selling Real Estate
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Buying properties with a HELOC?

Hank Austin
Spokane, WA · Member since 2018 · 20 posts · 2 votes

Hi everyone,

I have just recently obtained my brokers license in the state of Washington and I also have a decent amount of equity in my home that I have lived in for over 5 years and I was wondering if there were any webinars/videos/articles or anyone out there that has succeeded in buying property with a HELOC. I have about 100k in equity and I would love to make a move and utilize that equity for my benifit.

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Christian Nachtrieb
Rental Property Investor · Medford, MA · Member since 2016 · 288 posts · 171 votes
7y

@Hank Austin I used my HELOC as the entire 25% down payment, and the remaining balance as the rehab budget. I'm currently putting in finishes on the property and will hopefully have a renter in there very soon, at which point I will have the unit appraised and refinance to pull my equity out and pay back the HELOC.

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  • Ryan Campbell
    MD · Member since 2020 · 3 posts · 2 votes
    6y

    Episode 301 of the podcast goes over it as well.

    0Reply
  • Jimmy Epolito
    Real Estate Agent · Clermont Florida · Member since 2019 · 55 posts · 83 votes
    6y

    @Matt Everling Sent you a PM.  Hope this helps.  Keep in touch, I would love to hear how it works out for you. Once I get a property lined up I will document my journey as well.

    0Reply
  • Steven Heng
    Real Estate Agent · Lowell, MA · Member since 2018 · 1 post · 0 votes
    6y

    Hi all, Ive recently paid off my home so I currently have no mortgage. Im thinking about pulling a HELOC to purchase my next fix and flip. Im just wondering if anyone has done this? Using a heloc on your personal residence to invest in a fix and flip?

    0Reply
  • Gary Parilis
    Rental Property Investor · NJ and PA · Member since 2019 · 206 posts · 105 votes
    6y

    @Jimmy Epolito Are you buying in Florida? I can recommend a lender that will loan 75% LTV, based on the ARV. If you pay cash, you don't need to wait a seasoning period. PM me if interested.

    BTW, I'm in the process of getting a HELOC on one of my properties and a cash-out refi on another. My reasoning is I'll definitely be using the full refi amount, and plan to keep the HELOC available for a combination of reserves and investments. I plan to BRRRR, so I can recycle the funds through multiple properties -- paying cash initially for each so I can keep the velocity high (and closing costs low).

    0Reply
  • Jimmy Epolito
    Real Estate Agent · Clermont Florida · Member since 2019 · 55 posts · 83 votes
    6y

    @Gary Parilis i live in Central Florida but I bought my first property in Columbus Georgia.  I'm looking again in Columbus as well as Birmingham. I don't like the seasonality of the Florida markets and prices are steep compared to a lot of other markets.  Are you investing in Florida?

    1Reply
  • Eli Schwartz
    Rental Property Investor · NY NJ · Member since 2019 · 65 posts · 36 votes
    6y
    Originally posted by @Matt Everling:

    @Jimmy Epolito can you expand on that a little more? How can you add the rehab cost to the HUD? I'm assuming you mean the HUD-1 statement?

    Hi Matt, 

    You basically use a strategy called "Delayed Financing", exactly how it sounds, you delay the finance until you're ready to finance.

    There's a lot of strings attached though.

    -You'll only get up to 75% LTV or 100% of HUD whichever is lower.

    -If i remember correctly you only have 90 days to finance from original closing.

    -The original closing has to be all cash.  

    Hope this helps

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @Jimmy Epolito Columbus, Ohio?

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    0Reply
  • Jean-pierre Martinez
    Reisterstown, MD · Member since 2017 · 25 posts · 8 votes
    6y

    @Christian Nachtrieb

    Do you need to have a renter before you refinance?

    0Reply
  • Account Closed
    Investor · Boca Raton, FL · Member since 2017 · 108 posts · 18 votes
    6y
    Originally posted by @Christian Nachtrieb:

    @Hank Austin I used my HELOC as the entire 25% down payment, and the remaining balance as the rehab budget. I'm currently putting in finishes on the property and will hopefully have a renter in there very soon, at which point I will have the unit appraised and refinance to pull my equity out and pay back the HELOC.

    curious what if you buy  100k property using heloc (making aggressive cash offer) but the property is already to rent ready not much rehabbing could be done... how do you get your ALL your heloc money back out? best options after that

    0Reply
  • Phil Denton
    New to Real Estate · Cincinnati, OH · Member since 2019 · 51 posts · 15 votes
    6y

    @Jimmy Epolito I have heard the same thing about using HML as a last resort. I'm a complete n00b in real estate but I think you can get creative with money.

    I know one guy whose in-laws didn't do too good a job of investing their money so he offered them a better return (and stability) by partnering on a multi-family. Another borrows money off his friend's HELOC. The HELOC costs 4% but my friend pays 8% so the guy with the HELOC makes a 4% spread on money that is otherwise sitting stagnant in his mortgage. I met with a friend last week and he gave a verbal commit to 12-18% simple interest on a short-term loan. When I mentioned that I have funds of my own and just need help with stretch/overflow he said he could do 1% per month to keep it simple.

    So... I'm not here to offer social commentary or anything but I'm starting to see why people on the Bigger Pockets podcast and other investing series say "your network decides your net worth". I love that this industry is all about working together to put people in homes!

    0Reply
  • Jimmy Epolito
    Real Estate Agent · Clermont Florida · Member since 2019 · 55 posts · 83 votes
    6y
    Originally posted by @Remington Lyman:

    @Jimmy Epolito Columbus, Ohio?

    Columbus Ga.  I have heard great things about Columbus Ohio however!

    1Reply
  • Matt Everling
    Rental Property Investor · Temecula, CA · Member since 2019 · 128 posts · 54 votes
    6y
    Originally posted by @Eli Schwartz:
    Originally posted by @Matt Everling:

    @Jimmy Epolito can you expand on that a little more? How can you add the rehab cost to the HUD? I'm assuming you mean the HUD-1 statement?

    Hi Matt, 

    You basically use a strategy called "Delayed Financing", exactly how it sounds, you delay the finance until you're ready to finance.

    There's a lot of strings attached though.

    -You'll only get up to 75% LTV or 100% of HUD whichever is lower.

    -If i remember correctly you only have 90 days to finance from original closing.

    -The original closing has to be all cash.  

    Hope this helps


    It does help. Thanks Eli!

    0Reply
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