How would you use a 350K HELOC

Question

Asking for a friend ;)

You just refinanced your first home and got approved for 350k HELOC.  You live in LA, do you invest local? Do you look out of state? Invest in single family, look for multi family?

Mat O'Grady · Answer

@Michael Barcena

I don't know the market where you are but in my market, I could use it to purchase a multifamily (2-4 units) with 25% down and a 30 year mortgage, so that would be a property worth $1,400,000. I would never do that, but maybe that is what the prices are where you live.

If I was in your situation, I would research the markets that are near me and find a place that makes sense numbers wise. I would need to see that the rents will cover all the expenses including the mortgage and still make $200 a door, that amount is probably different where you are. I wouldn't use all the money for a down payment. I would keep it for reserves and for fixing up a place.

You have time and money, now you need to get the knowledge and a deal.

You have the time, now you need to do research and find the best places to invest and be ready to act. Get pre approved for a loan beforehand and when you find something act quickly.

Michael Barcena · Answer

@Mat O'Grady thank you for the goal setting questions. Goal: 10K in Cash flow. Management comfort- really want to be  hands on in management in the next 5 years and then have a company manage. Time : have 9-5 now but that will soon change to 3  12 hour night shifts, so I will have the time.

Mat O'Grady · Answer

@Michael Barcena

What are your goals? What is your comfort level with control over your property? What is your available time to commit?