As a newcomer in real estate investing, is 100% borrowing worth?

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As a newcomer in real estate investing, is 100% borrowing worth?

Md Kamrul Huda
Member since 2019 · 3 posts · 0 votes

Since I don't have cash and I lost my job. I want to borrow from HELOC for down payment and want to borrow the rest amount from lander to invest on 10 single family residential properties to generate $1500 per month cash flow in Charlotte Metro area. Please advise whether it is too risky in current market conditions with approx. 7.5% interest rates. Thanks in advance.

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  • James McGovern
    Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 409 votes
    1y

    Helix loans are expensive right now. Best to sell items to raise funds for the down payment and consider hard money for the rest 

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  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    1y

    With no job and no savings you should not be exploring strategies to purchase any real estate. I recommend getting your personal financial situation in order first.

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
    1y

    @Md Kamrul Huda Using 100% borrowed funds via a HELOC for the down payment and a loan for the rest, to buy 10 rental properties without a job or cash reserves is extremely risky, especially in today's market with ~7.5% interest rates. Even minor issues like vacancies, repairs, or rising HELOC payments could wipe out your projected $1,500/month cash flow or push you into negative territory.

    Most lenders also won’t approve financing without stable income or sufficient reserves, which could make it difficult to close on the properties even if you find good deals. Instead, consider starting with a single, manageable property, like a house hack or mid-term rental, while focusing on regaining stable income. 

    This allows you to learn the business, build equity, and create a solid financial foundation. Real estate is a great path to wealth, but only when approached with stability and strategy. Try to improve your ROI with Tax benefits from Rentals.

    This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

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