Rental Property Investor · Miramar, FL · Member since 2019 · 1 post · 0 votes
Any recommendations on getting a HELOC on my residential home to pay off the debt faster and use the equity to purchase my first multifamily investment? Do you recommend using companies like Replace your Mortgage and Speed Equity?
Real Estate Broker · Chicagoland Area · Member since 2017 · 48 posts · 19 votes
7y
I'm not familiar with those two companies. I'd call around and see what your local banks and others have to offer. The largest variable between lenders is the LTV. Some will do 75% LTV others will do 90% LTV. Some will increase their LTV if you open other accounts with them (checking, savings, etc.)
Also take a look at the Cash Flow Index method for paying off debt. It changed my perspective of debt and how to prioritize pay off.
Replace your mortgage is no good, because you end up with a variable rate for your whole mortgage. I've had good luck with small HELOCs from PNC and PenFed. You can do the speed equity version by getting a small HELOC and putting a chunk of your mortgage on it. Then you can use all of your income toward your mortgage but still pay bills. Good luck.
Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
7y
I have leveraged my personal home equity for the last 15 years, and has been the best source of cash. I started in 2001 with a $60,000 HELOC with B of A, and today have a $421,000 HELOC with KeyBank. The terms are a 15 year draw period, 90% LTV and prime -.25% rate. It was the best I could find two years ago. I know some would say I have been risky, but it was the safest and cheapest money I could find, and I have never used hard money at those outrageous fees and points. It helped me flip over 30 properties, and now holding 22 doors and ownership into a 72 unit building with partner. I have washed, rinsed and reused the money many times and now have that line maxed into solid investments. I am now using another HELOC to flip and pay down and off my home HELOC. Just my thoughts! Best of luck