How did you use your HELOC?

Question

Good evening everyone!

I just got notice today that I have been approved on my HELOC and want to get some insight how other people have used their HELOC for real estate investment purposes. I would like to hear anything from flips, BRRRR, etc.

I’m still up in the air as to how I want to use mine and would like to hear your stories and how everything turned out from beginning to end.

Thanks for your input!

Darren Budahn · Answer

@Jorge Rubio

I’ve used my HELOC many times to pay cash for a property and then refinanced the property (which hopefully has some equity) to pay back the line of credit.

Caroline C. · Answer

@Jesus Lopez Jr we've used our HELOC's several times over the years to either be the down payment for buying an investment property, or to pay cash for the property and refinance later. Always for buy and holds. When we draw down the line of credit, we always work to pay it back as quickly as possible to avoid paying too much interest, and to have the line available to us if we find another investment we want to make. The nice thing is that you can use the line over and over and over again, depending on what your cash needs are at a moment in time.

Ray Evans · Answer

@Jesus Lopez Jr I used my small Heloc to pay ahead of my Hard Money loan.(I pay then I get reimbursed)I get different terms offered all the time.Its a great thing to have in my hip pocket.

Best of Luck

Jonathan Barr · Answer

Hi I haven't used my HELOC yet but I plan to invest it into apartment deals I am working on.   The spread between what I'm paying on HELOC and what my returns will be nice.   So the way I look at it, its free money!

Frank Chin · Answer

Got my HELOC some years back to invest in properties I pick up at foreclosure auctions. Went to one auction, won the bid, and the foreclosing bank would even give me a mortgage for 90% if I bring my tax returns and I meet their underwriting requirements, subject to review. I walked out of the auction with a house and a mortgage.

Afterwards, during the review, it was discovered that the remainder of my 10% down, about $14K will be from a HELOC. They said no, down payments must be in seasoned cash, at least 6 months. Fortunately for me, my wife handle finances for her mom, had a joint account with her mom for over 10 years, over $1000K. They accepted that.

For us, it's my mother in laws money, and at the closing, the bank check I provided was actually paid out of the HELOC. A friend of mine, who did some investing back then made a deal with a co-worker to add his name to a bank account with his co-worker so if any one asks, he had seasoned cash for a number of years to show. He paid his co-worker a few dollars to add his name.

Account Closed · Answer

@Caroline C. We just got a $250k HELOC and plan to do the exact same thing! :)

Andreas Thuresson · Answer

We just got a $250k HELOC and plan to do the exact same thing with getting one investment property to start and hopefully another one not to far after.

Jorge Rubio · Answer

@Caroline C. Can you use HELOCs to make cash offers on properties and then refinance them with a regular mortgage?

Patricia Taveras · Answer

@Frank Chin

Hi Frank. I used my small HELOC to purchase a double wide in good condition for $15,000.  We bought a piece of land to put it on, poured foundation, and titled as real property. We are all in on this property for $44,000 and rent it for $800 a month to tenants who consider it home. This was our second rental, and the first property we bought specifically as a rental.  We have since moved on to buying single family homes we rent out on airbnb, which we do prefer because these assets will appreciate.  But the double wide performs well, the tenants always pay on time, and we learned a lot through the process. It was one of the steps we took in getting started and I'm happy we did.

How did you use your HELOC?

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