Should I use my HELOC to BRRRR?

Question

Desta White · Answer

Hi there! Wondering how this worked out for you. Any updates? I'd love to know, thinking of following this same strategy.

Ivan Widman · Answer

Hey guys, I'm in a similar situation and curious how this worked out for you. I just got approved for a HELOC on my primary residence and was looking to use it to fund my first rental. My concern is locking that money up and having to pay the 6% interest on it over a long period of time. I want to go the BRRRR route to get as much of the HELOC money back as possible but very new to the whole thing. If I don't go the BRRRR route i'm concerned I'll have to use my paycheck for years to pay down the HELOC before I can buy my second. So much to learn....

Jessica Muto · Answer

I'm going to follow this conversation because I have the same question in general. We just got a HELOC on our primary residence to use to buy our first rental, and the math of how that gets paid back and how we get more money for the second deal, etc, is still a little cloudy for me (I thought that being an English major meant I would never have to do math in my life, oh well. ) What you said makes sense to me. When you ran the deal through your calculator, the one you will use your HELOC for, do you factor 0% down to account for the interest on the down payment money, if that makes sense?

Good luck!

Jacob Howell · Answer

@Harv Yergin IV :)