All Forum Posts by: Brandon Morgan
Brandon Morgan has started 40 posts and replied 112 times.
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
@Brandon Morgan
I bought my first two rentals from a HELOC since I didn't have any money at the time. Then I did a cash out refi on my primary a couple years later to use the cash to buy 3 rentals with 20% down on each. Using this equity in my primary launched my real estate investing with zero out of pocket money. Since then, I've scaled up with 3 more cash out refis to buy 12 rentals for free (no out of pocket expenses for down-payments on new purchases). I'm a fan of using equity to scale up. Not all of us have 50-70k sitting around in savings for down payments for new purchases. So might as well use built up equity just sitting there doing nothing!
How was your experience using the HELOC for buying rentals. I have heard HELOCs are better for flipping as opposed to rentals. and I agree, it's a lot, I make a little over 100k a year so I know I can pay it all back but having 50-70k at one time jus sitting there is not possible for me.
were there any issues with the changing of rates with the HELOC and the cash flow from the rentals? or did that not matter because you paid back the HELOC's as soon as possible?
you say you took out 38k from the HELOC as a down payment. what percent down was that? how much did your first couple properties cost?
wow! really nice strategy. Im thinking I can probably use some of the cash I saved up with the HELOC to be able to buy now since I make a lot with my W-2. thanks a lot!
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
@Brandon Morgan
I bought my first two rentals from a HELOC since I didn't have any money at the time. Then I did a cash out refi on my primary a couple years later to use the cash to buy 3 rentals with 20% down on each. Using this equity in my primary launched my real estate investing with zero out of pocket money. Since then, I've scaled up with 3 more cash out refis to buy 12 rentals for free (no out of pocket expenses for down-payments on new purchases). I'm a fan of using equity to scale up. Not all of us have 50-70k sitting around in savings for down payments for new purchases. So might as well use built up equity just sitting there doing nothing!
How was your experience using the HELOC for buying rentals. I have heard HELOCs are better for flipping as opposed to rentals. and I agree, it's a lot, I make a little over 100k a year so I know I can pay it all back but having 50-70k at one time jus sitting there is not possible for me.
were there any issues with the changing of rates with the HELOC and the cash flow from the rentals? or did that not matter because you paid back the HELOC's as soon as possible?
you say you took out 38k from the HELOC as a down payment. what percent down was that? how much did your first couple properties cost?
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
@Brandon Morgan
I bought my first two rentals from a HELOC since I didn't have any money at the time. Then I did a cash out refi on my primary a couple years later to use the cash to buy 3 rentals with 20% down on each. Using this equity in my primary launched my real estate investing with zero out of pocket money. Since then, I've scaled up with 3 more cash out refis to buy 12 rentals for free (no out of pocket expenses for down-payments on new purchases). I'm a fan of using equity to scale up. Not all of us have 50-70k sitting around in savings for down payments for new purchases. So might as well use built up equity just sitting there doing nothing!
How was your experience using the HELOC for buying rentals. I have heard HELOCs are better for flipping as opposed to rentals. and I agree, it's a lot, I make a little over 100k a year so I know I can pay it all back but having 50-70k at one time jus sitting there is not possible for me.
were there any issues with the changing of rates with the HELOC and the cash flow from the rentals? or did that not matter because you paid back the HELOC's as soon as possible?
ahh very brilliant. I think I will try that strategy. I make over 100k at my W2 job so I will use about 40k of my HELOC as a down payment (I was given a 70k HELOC) and then ill just pay it off as soon as possible. seems like a really good strategy!
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @John Morgan:
Quote from @Brandon Morgan:
Quote from @John Morgan:
@Brandon Morgan
I bought my first two rentals from a HELOC since I didn't have any money at the time. Then I did a cash out refi on my primary a couple years later to use the cash to buy 3 rentals with 20% down on each. Using this equity in my primary launched my real estate investing with zero out of pocket money. Since then, I've scaled up with 3 more cash out refis to buy 12 rentals for free (no out of pocket expenses for down-payments on new purchases). I'm a fan of using equity to scale up. Not all of us have 50-70k sitting around in savings for down payments for new purchases. So might as well use built up equity just sitting there doing nothing!
How was your experience using the HELOC for buying rentals. I have heard HELOCs are better for flipping as opposed to rentals. and I agree, it's a lot, I make a little over 100k a year so I know I can pay it all back but having 50-70k at one time jus sitting there is not possible for me.
were there any issues with the changing of rates with the HELOC and the cash flow from the rentals? or did that not matter because you paid back the HELOC's as soon as possible?
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @Daniel McDonald:
I literally did this exact same thing. I took out 55k for renovations. Second home was going to be a house hack so I only put down 3.5% but needed the 50 for renos. My goal is to pay back that 55 within 2 years, not doing a refi though. Don't want to lose my rate but the HELOC rate is at 10% now so tha'rs pretty tough. It was like 4% when I opened it a few years ago, so maybe looking into fixed ones instead.
How was your experience using the HELOC for buying rentals? I have heard HELOCs are better for flipping as opposed to rentals. is there an issue with the cash flow and the changing rates since its basically at 10% now? I got approved for 70k but still debating what my next move will be.
How was your experience using the HELOC for buying rentals. I have heard HELOCs are better for flipping as opposed to rentals. and I agree, it's a lot, I make a little over 100k a year so I know I can pay it all back but having 50-70k at one time jus sitting there is not possible for me.
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @John Morgan:
@Brandon Morgan
I bought my first two rentals from a HELOC since I didn't have any money at the time. Then I did a cash out refi on my primary a couple years later to use the cash to buy 3 rentals with 20% down on each. Using this equity in my primary launched my real estate investing with zero out of pocket money. Since then, I've scaled up with 3 more cash out refis to buy 12 rentals for free (no out of pocket expenses for down-payments on new purchases). I'm a fan of using equity to scale up. Not all of us have 50-70k sitting around in savings for down payments for new purchases. So might as well use built up equity just sitting there doing nothing!
How was your experience using the HELOC for buying rentals. I have heard HELOCs are better for flipping as opposed to rentals. and I agree, it's a lot, I make a little over 100k a year so I know I can pay it all back but having 50-70k at one time jus sitting there is not possible for me.
Post: Using HELOC for purchasing rental property Vs. house flip
- Posts 112
- Votes 111
Hi all, So I recently got approved for a HELOC of 70k from my primary residence. I am just starting out in real estate but financing a home is very difficult. I have been thinking of using a Heloc to cover the down payment of a new home plus some repairs in my own home and then I can handle everything else from there. I make a little over 100k a year so I know ill be able to pay everything back. it was just the down payment plus everything else at one time making things difficult. I think I'm definitely going to use the HELOC for a down payment however I have heard HELOCs are better used for a flipping situation as opposed to buying a rental property. any thoughts or past experiences with this? also looking for any other good ideas to use the HELOC for. open to any suggestions.
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @John Morgan:
@Brandon Morgan
I bought my first two rentals from a HELOC since I didn't have any money at the time. Then I did a cash out refi on my primary a couple years later to use the cash to buy 3 rentals with 20% down on each. Using this equity in my primary launched my real estate investing with zero out of pocket money. Since then, I've scaled up with 3 more cash out refis to buy 12 rentals for free (no out of pocket expenses for down-payments on new purchases). I'm a fan of using equity to scale up. Not all of us have 50-70k sitting around in savings for down payments for new purchases. So might as well use built up equity just sitting there doing nothing!
wow that's amazing! great work!
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
Quote from @Scott E.:
You won't be able to tap into all of that home equity, but doesn't sound like you need it anyway.
The bank will probably lend ~80% CLTV. Meaning you take 80% of your home value, then subtract out your first mortgage, and that's about what they'd give you for a HELOC. Depending on loan size, credit score, and other factors this CTLV might be limited to 75% or even 70%.
I think it's a good plan to leverage your homes equity to buy another deal. But the challenge will be finding something where the numbers make sense because what you will be doing is 100% financing on that investment property (you'll have your 1st mortgage on that property, then the HELOC is indirectly debt on that investment property). Plus you'll be 100% financing with expensive debt. Both your 1st mortgage and your HELOC will come with high rates.
It's tough enough to get deals that cashflow nowadays if you're putting 30%-40% cash down.
Anyways all that being said, get the HELOC. It'll be good to have access to that money in case an opportunity does come along.
Thanks, it seems like a good tool overall regardless. any specific companies you recommend? I have good credit. I have been going between Penfed and Bank of America.
Post: using home equity or HELOC as a down payment?
- Posts 112
- Votes 111
does anyone have any experience with using their current homes equity for down payment on another home? I have a lot of equity on my current home and was thinking of taking some out in the form of a HELOC as a down payment. based on all my research it seems like a useful tool. I have over 200k in equity and I wouldn't need more than 50k for a downpayment. any advise on this?