First-Time Introduction and HELOC Question:

4 Replies

Hello all, My name is Brian Akamine. I'm new to BP. I'd like to introduce myself to the group and also I have a question for advice.

First, a little of my background. I'm a former SoCal native 35 years in a city called Hawthorne. I'm 54 living in King of Prussia, a suburb of Philly. Two teenage daughters married 22-years.


I own a 4-unit apartment in Gardena, CA with my mom and sister (Joint Tenants). It has (2) 1-Bdrm and (2) 2-bdrm. It's paid off, appraised at $958K, took out a $300k HELOC to use for consumer debt consolidation, cash flow $2750 per month. More wiggle room for rent increase, but long-term tenants and not yet ready to explore increased cash flow.


I also own a 3-bdrm row-home in Norristown, PA. Steady tenants. Rent $1050 per month. Appraised at $105K. I purchased in 2003 for $90K, lived in it for 10-years then moved into my aging mother-in-law's house as a permanent living arrangement. Back then, values when up in 2008 to $135K and took out an HELOC for $35K and have been paying interest only for past 8-years (a time when I was under-employed doing non-profit work/Christian Church planting ministry). I have a 1st Mortgage of $59K principle balance at 5.37% Fixed (16-years left to pay off). The HELOC is $34K currently at 4.5% ARM.

With this rental property that used to be our primary residents, I'd like to begin the process of setting it up as an LLC and begin investing in more rental properties in the area and even other states as Orlando, Florida and beach communities where my sister lives.


The Bank of America $300K HELOC was a 2.9% Adjustable Rate and we recently locked $212K into a 4.7% 30-year Fixed Rate. The payment is $1108 per month.

The remaining balance is $88K is still on the ARM but we can lock it into a Fixed Rate of 2.4% if we do it by July 31st at a monthly payment of $334.


QUESTION FOR ADVICE: I was thinking about using this $88K to pay off the balance of both 1st & 2nd HELOC on the Norristown property so that it rents would be all "cash-flow" minus expenses. Should I do this or use the $88K HELOC remaining balance at 2.4% Fixed Rate for PRIVATE FUNDING to get a higher rate of return "OR" use this to buy another property as a "BRRR" Investment to leverage the equity for growth?

Any advice? I'm not sure yet what to do? What's the most profitable approach to using this?

Note: I'm not asking for any mentoring or soliciting any offers or such. Strictly the first intro of myself and a real-life dilemma.

Brian Akamine

@Brian K Akamine   that depends on what your financial goals are long term. If you're just trying to have the properties all paid off free and clear before you jump into the next one then go ahead and pay it off if it makes you feel more comfortable. Take into account how much cash flow you're making off the Norristown property now compared to how much cash flow you'll make if you end up paying it off. And is that extra income going to help you reach your goal faster or just slow you down?

Compare your opportunity costs. If you're already making a decent amount of cash flow from the property already then I would use that extra money and put it into another property in order to build your portfolio faster and increase your passive net worth. Otherwise if too much risk is your biggest concern then go the slower route of paying it off free and clear then move on to the next. It comes down to how risk averse you are and how fast you're wanting to build. At the end of the day every investor is different. Some want to build fast while others want to go slow and steady. Hope this helps.

Agreed, it is up to your risk tolerance. Me personally, I love the BRRR method considering that you already have loans etc. in place on the property and could use the new capital to expand and gain other rents monthly while growing the long term portfolio. In my opinion, it also depends on whether you have other capital to purchase more outside of this scenario.

For instance, if you pay off your current other mortgages, do you have other monies set aside to purchase / grow the portfolio? If not, then once they are paid off will you have to ultimate re-finance them again to gain capital to continue growth. IF that is the case, it's likely easier to keep them locked in as they are to keep from paying any type of refinancing fees/closing costs/points etc. associated with obtaining new financing.

Again, we only know portions of it, but from my perspective, if you are positive cash flowing from your properties like it seems you are, then I would take that money and develop another one or two more streams of income / cash flow from another couple of properties. By doing so, you will continue towards your economy of scale more positive cash flows over time add up to purchasing power for other properties. There is a company I know that has got to the point that they take rents from their rentals and purchase properties free and clear weekly / monthly, thus being able to expand exponentially (takes a while to get to that point though). Just my thoughts, hope it helps some, and let me know if I could be of services in the Central FL , Brevard County / Space Coast area.

Thanks Tony & Dwayne,

I definitely want to increase my portfolio. My goal is to increase my awareness with the analysis tools and methods in BP Pro so that I have a level of savvy and confidence to spot a good deal on a napkin. Knowing what I know now since purchasing the California multi-unit back in 1988 and paid my share of sweat equity rehabbing and managing it from the East Coast with a workable system, I'm excited to expand and roll-up my sleeves to leverage our equity to buy vacation rental properties in Orlando, Florida for PA snowbirds and retirees and properties in the Philadelphia/Montco/Del-Chester regions.

My sister, has been in the travel industry for years, she's a manager for Holland America Cruiseline and lives in Heathrow, Florida and has worked for Disney, AAA, and Air New Zealand.  We want to leverage networks and service the retiring boomers and emerging millennials demographic (smartphone-driven) Uber/AirBnB savvy tenants.   

Our next 5-year short-term goals are:


Prioritize cosmetic/capital improvements for the CA property

Increase Rents to Market Rates for maximum cash-flow

Explore web-based Property Management/Payment System/Security Cameras Software Tools/Smartphone driven

Establish a CA LLC Operating Structure to protect liability/assets

Increase our HELOC Line and maximize equity in CA property

Develop and improve GM Maintenance partnerships I can trust for an out-of-state remote until we decide to contract a reputable Property Management company.  


Pay-off the 1st Mortgage on the Norristown, PA property to free up equity 70% to use that so my sister and I can begin to "get our feet wet" buy more properties.  

Develop my networks as a PRO member and increase my acumen in preparation for overall vision for East/West Coast property portfolio.  (I'm still determining my personal "Freedom-Number" for Retirement and when I decide to quit my full-time job at SEPTA Public Transportation Operator)

Establish an LLC with a Real Estate Attorney and "Begin with the End In Mind" for operating structure and legacy estate planning. I need to understand more of the in's and outs of the legal aspect of structure from multi-state properties, LLC"s or REIT's and the best way to structure assets with family-related inheritances and partnerships. (I welcome advice in the Legal/Tax aspects in this part of RE Investing). I'm inspired by "Rich Dad, Poor Dad's" concept of leveraging the legal entity power of the corporation to pay a less taxes and expense everything I'm entitled to maximize cash-flowing assets. I'd like some advice in these areas with you all!!

Get familiar using the Property Analysis Tools as a Pro Member and practice analyzing 50-100 properties to get confident in making it intuitive to know when I see a good deal.  I believe in proverb "measure twice, cut once." 

Prioritize and narrow-cast on experimenting with the BRRRR method, buy-hold, single family, multi-unit and eventually some commerical properties (to assist new church storefront start-ups, a personal passion of mine as a church planter).

I welcome everyone's comments especially perspectives that will inform my demographic area and overall goals and objectives.

I appreciate the feedback, I see the value from this networking forum.  

I consider still a novice in this new platform that I discovered in BP!   

Happy Easter everyone,


All are great goals! I got interested in pursuing more of an active investment role from the BP podcasts. I literally have downloaded a lot of them on my phone, and when I get into my car they start playing automatically. I started at the last ones have listened to close to 50 with the goal of listening to all of them. Some of these have come from my long 8hr drives to North Florida from Central / East Coast FL. There are just sooooo many perspectives and great tips included. There is definitely a wealth of information around this site and I too and trying to put as much of it to use as possible.