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Updated almost 4 years ago on . Most recent reply
New to real estate investment TX
Hello all, just a quick introduction. New to real estate investments. Closing a deal in suburbs of Texas. Took out HELOC from my home in California and was able to pay cash for a home in Houston. Maybe not the best approach, but would like everyone's feedback. Thinking of doing the same cycle again in April of 2022.
Dan
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#3 Wholesaling Contributor
- Rental Property Investor
- SE Michigan
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#3 Wholesaling Contributor
- Rental Property Investor
- SE Michigan
Texas, including Houston is a great market for single family rentals.
Paying cash used from a HELOC is not a bad way to buy, but it is a bad way to hold property. There are a number of reasons but most significantly is you are not getting the full interest deduction you would have if the loan was against the rent property. Because of this, you will pay more taxes than if you had a mortgage on the property. Paid-in-full properties are also targets for lawsuits.
Put a mortgage on this thing, pay down your HELOC, and then go buy another.
Congrats on taking the first step!