Buying multiple rentals cash then using HELOC to buy more.
Hi Everyone!
I am a real estate agent agent in the in the NW Chicagoland area. I work with many investors and I am ready to start investing in rentals myself. I am interested in the Rockford, IL area for the low prices and decent rental rates. I plan to buy 2-3 houses for 50k or less a piece then uses HELOCs to recycle the money and buy more. Are there any holes in this strategy that I am not considering? I can't qualify for a loan until I am two years in the agent business so this is why I plan to leverage in this way.
Have you driven by the 50K and under houses in Rockford? You're going to want someone very familiar with the area to guide you in your property selection. These properties are likely in rough areas and need extensive work. Are you trying to get HELOCs on the rental properties? If so many lenders will have a 6 month seasoning period before you can take out a loan. I don't see any holes in your strategy but go into it knowing there is a lot of work involved in low price point rentals.
Originally posted by @Bartholomew B.:Have you driven by the 50K and under houses in Rockford? You're going to want someone very familiar with the area to guide you in your property selection. These properties are likely in rough areas and need extensive work. Are you trying to get HELOCs on the rental properties? If so many lenders will have a 6 month seasoning period before you can take out a loan. I don't see any holes in your strategy but go into it knowing there is a lot of work involved in low price point rentals.
Thanks for the feedback Bartholomew! Yes I have driven it some but need to do more. I live about an hour away from Rockford. I have seen several houses on the MLS listed for around 50k with minimal work needed though I assume they are on the rougher side of town. My intention behind this post is definitely to network with other investors or real estate professionals in the area. Do you have experience in the Rockford area?
I invest just north of Rockford in Machesney Park, IL. I would recommend you check out the Rockford Apartment Owners Association. I'm sure you can find a member that is or has implemented the exact strategy your looking into.
I would also suggest dropping into a meeting with the Rockford Real Estate Investors Association. I've found the members and insightful and more than willing to help new or newer investors.
Meeting information can be found through their FB page.
I also used a HELOC recently to purchase a SFH residence in Rockford. Rockford's affordability allow a sizable HELOC to cover most down payments.
'Feel free to drop me a message for more information.
Great question Joseph! Alexander I will definitely be looking into Rockford Real Estate Investors Association. I am from Elgin, IL and my father lives in Rockford. I am new too investing and was actually looking to start in the Rockford area.
I have a chance to possibly close on an off-market seller finance deal in rockford for my first deal if the terms are right. I am very excited!!
@Joseph I'm planning to do the same because I'm in Roselle with an average property price of 300k and with the interest rates continuing to go up a 60k down payment is not going to get me to cash flow.
call Can Duit Electric in Rockford, he had real estate in Rockford, lived there since 90s.