All Forum Posts by: Chris Wierman

Welcome to BP!

Hi Maria, welcome to BP!

Welcome to BP @Account Closed! having a fellow investor with money truly is a good problem to have.

Welcome @Charles Garcia!

Sorry @Bill S.! That sounds like a tough day, but it must feel great to wash your hands of that tenant and that situation!

If you know you will use it for investing either way, then I would just keep it in cash. If you use it to pay down your mortgage, and then turn around and pull it out for investing, you will likely be borrowing at a higher rate of interest than what you have for your primary mortgage. Unless your HELOC rate is substantially lower than your primary mortgage rate (possible, but very unlikely), you would be better off not paying down your mortgage. Also, there is no "approval process" to spend cash, so you don't have to bother with the bank at all if you keep it in cash. Finally, most HELOCs don't allow you to borrow 100% of your equity in a property (usually around 75-90%), so if you put that money towards your mortgage, you might only have access to a portion of it when you take it back out via a line of credit.

Just to clarify, this is only if you know you will use it for investing either way - there are other personal considerations to take into account if you wanted to pay off your mortgage for other reasons (lower debt, refinancing, lower monthly bills, etc.).

Seems like a pretty thin profit projection for taking a lot of holding cost risk. Throw in one or two 'what if' scenarios and all of your profit might be eaten up. What if there needs to be some mold remediation? What if it takes 6 months to sell? There are a lot of issues that may come up and your margin might not be high enough to absorb these and still reap a profit.

@Brian Walsh Great idea - I love the hands off approach and that you can accommodate them whether or not they are electronically inclined.

@Brian Walsh How were you able to set it up so a bank cashes your rent checks? Is this a service that most banks provide? I hadn't ever heard of that before.

Welcome!