All Forum Posts by: Aaron Howell

The above advice is spot on. I would say a HELOC would be great for short term money that you need for a flip. You could borrow from the line, Renovate, and then sell and pay the line back down.

Charlottesville is tough to make cashflow.  There are deals out there but you've gotta be ready to pounce b/c they don't last long.

@Jed Devine is more current on the Richmond Market and he's closing next week on a property.

Welcome Rob ! You're in the right place to learn.

Be sure to check out the Podcasts and the Education Tab.

Dave Ramsey advice and Real Estate investing are pretty much polar opposites.  Ramsey is good for people making $30-40K/year but we're all using real estate to outsource our debt.

I think his advice is sound but it has very little to do what I'm doing.

Check out the book Master Your Debt by Jordan Goodman and Bill Westrom.  That'll get you started.

Basically you're gonna use the simple interest of your HELOC to pay down the long term interest on your mortgage. Then you'll pay down the HELOC along with continuing to pay your mortgage monthly then repeat the process over and over.

Yes !! You're going to incur an extra payment monthly (your HELOC payment) but it will knock tons off your Mortgage principle thus saving you tons in interest over the years and be relatively small compared to the mortgage.

There are lots of naysayers about this concept but the interest pay down is the pot at the end of the rainbow (or amortization schedule in this case).  

One concern: Use your HELOC for short term debt and not long term.

Could be an easy way to pull out cash for future ventures.  You could also use it to pay down the principle on the primary mortgage (complex vs. simple interest).

You'll need to hold it for at least 6 months to a year before you can refinance if you're financing in the first place.

If you buy it cash, rehab and then look for a loan to refinance then you may not have to wait as long.

Check out The Book on Investing in Real Estate with No and Low Money Down.  It may give you an idea or ideas on creative financing. 

Its a strategy that can work if you're disciplined. The premise works on the fact that the HELOC has simpler interest compared to the 30 year amortized mortgage. You're knocking out huge chunks of Mortgage with the Heloc and thereby eliminating huge chunks of principle so you never accumulate interest on that portion of compounded mortgage.

You don't need to pay for a program to do this for you (put your credit card away) but basically you need to understand the principle and be able to apply it.

I liked Grant Cardona's 10X Rule.  The first time I heard his podcast for BP I thought he was full of himself but he grew on me.  The book was good.  Its not revolutionary like Rich Dad, Poor Dad but it will help with your thought process.