All Forum Posts by: Dale Miller

Glad I could respond. A little more info: The HELOC saved me more than 10K. Also, it gives me the freedom to move the money around. There are some risks - in general - managing your money wisely and doing the cost-benefit-analysis on how you use said funds. I personally wouldn't use the money to buy a vacation or pay for wedding. However, an income producing asset, yes! ...and within my own personal comfort zone and limits. FYI I tried one large national bank and one small regional bank. The smaller bank had the better deal. Your credit score and debt to income will come into play. I say, look into it and do lots of research.

Hi Dale,

Wow, this is my first post on biggerpockets and I'm already answering questions. Chuckle.

As you know, there's no one-size-fits-all scenario with regard to acquiring funds. That said, within the past few weeks, I obtained a home equity line of credit. I also qualified for a mortgage. Ironically, the line of credit is currently at 3% with a lock-in feature for whatever amount I choose to use. The rate is variable. For me, the biggest advantages the line of credit has over the mortgage is simply no closing or refinancing fees. That saves thousands. Secondly, the money is always available for a given term. In my case, 15 years. If I pay the money back one month but need it again the next month, I have access.  

You can get hard money loans with 0% down, but if you're looking for conventional loans you're generally looking at no less than 20% down

@Dale Miller Covid 19 changes the game dramatically. Lenders still remember 2008 and they’re playing the current situation like that...25% down right now (really, since about March 15th) is stable stakes just to play. If that’s outside the comfort zone, then it’s time to stay on the sidelines.

For the record, I’m on the sidelines for the next 60 days, or maybe longer. Depends how May rent collection turns out.

@Dale Miller

Hi Dale, just a thought, why not move to a different market? Your 40k may not seem much in the market you're looking at but in a rural market where fixer uppers are selling for 30-40k this is far more significant. Find the right deal in those markets, and pair with a hard money lender for the rehab. Then cash out refinance (BRRRR) at the end of the rehab once you've rented it out. You could scale up your rentals as your develop a track record.

@Dale Miller that’s just how it works for rental property with hard money lenders. If you don’t live there you need to put 20% down.

Maybe a house hack would be a better plan for you. Buy a duplex. Live in one unit and rent out the other. Some banks will tear that differently since it is your primary residence.

Please don't take just my advice on house hacking - there are risks (I'm sure you're aware). But BP has tons of podcasts on it. But if you've got 100% equity, I'd say you have great BRRRR options. Keep posting how this progresses please.

I agree with you that the price for entry in real estate is high. I would've never been able to had I needed 20% (the norm in my area). I was able to take out a home equity loan which I used for the down payment on my first rental, then refi that one to buy the second (now known as a house hack). I don't know your situation but options you might have (assuming it's a great deal) would be to use equity in your home and/or a 401K loan. 

But please make sure it's a good deal! That we you can refi/cash out and be on your way to your next deal with more options than you have today. Good luck (and congratulations on getting started)! Don't give up! 

You can find hard money for 12% and 2-- You just really have to make it happen. Do not give up.