@Ray Pope there are many ways to invest in real estate. You could actively flip or partner with a flipped to earn high interest or 50% of the profit. You could invest in rentals and just manage the manager. PM me and I can make a recommendation on a cheap HELOC and send you and article on how to invest in real estate that might give you a better idea of the way you want to go.
I answered a similar question on a different thread a couple days ago.
I would not partner with your dad in anyway, let alone a HELOC.
You’re welcome to disagree but my reasoning is from two main parts: 1. If things go south your dad literally loses the home. I wouldn’t want that risk on my shoulders at all.
Second HELOCs are usually callable, which means your bank can call the balance due whenever they want. That combined with the usually variable rates make them riskier for long term stuff. Short term can be okay but just FYI.
@Ray Pope - my .02 below:
1) I would not partner with your father for the obvious reasons. Capital in real estate (especially in this economy) is easy to get when you need it.
2) I would re-prioritize how you are looking at things. Start with searching for properties. Can you find a good value add duplex that cash flows? If so then figure out the financing part. As you go through this journey you'll realize financing is the easiest part.
3) A general anecdote on your comment of "At the same time, I've always like to do things on my own.." The one thing I learned in real estate is that if you want to succeed at scale you need to let go over time. For you first couple it is good to be as close as possible and do everything yourself to reduce costs, but I would urge you to reflect on this in the early stages.
4) I know taking the initial leap is tough. I speak with people all the time that have researched and toyed with the idea of investing for years. Be conscious of analysis paralysis. If you made the decision to invest: find something, model it out as accurately as possible, review the risks from all angles, and make an educated decision. The most important thing to do is get stated.
Good luck - BP is here for you
Caleb, I'm planning on using the HELOC only for short term because I want to BRRRR properties. So a refinance will be paying the HELOC back and I will use it again and again until my own funds are great enough to use. I really appreciate your input!
Thanks so much for the input guys!
Looking at doing something similar using cash from a family member's HELOC. They can pay it back on their own within 18 months, but would like to invest it in real estate. I'm looking at the legwork, running the numbers, property management, ect.
Partnerships can be a great way to mitigate some of the risk, but you share in the profits. As long as neither party is overextending and agrees upon a mutually beneficial agreement, they are a fantastic tool.
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