All Forum Posts by: Eric Robert

@Dave Foster - Thank you so much for a clear explanation!!

Thank you to all that have discussed this topic but it seems that there are differ opinions on the topic of a using funds from an investment property's HELOC as a down payment on additional investment properties. If you were to 1031 this investment property an the investment property's HELOC funds are spent, would they have to be paid back before the 1031 can be executed?

My Scenario:

Multi-Family Investment Property
Value - $500,000
Loan - $200,000
HELOC Balance - $50,000

(A) If I were to sell the investment property in a 1031 Exchange, would the $50,000 HELOC be paid off at closing, leaving a $250,000 gain that I can then put toward the new property in full?

OR

(B) Would I have to pay off the $50,000 HELOC first, sell the property, leaving me with a $300,000 gain to be used in full toward the new 1031 property?

Several post point toward using your HELOC on your existing multi-family for the down payment on another multi-family and use the 1031 to build up on your original investment property. If you cannot do this then option A would never make sense?

Thanks in advance!
Eric

I am seeking a 5+ unit building in the LA/Whittier/SoCal area. I have already exhausted the MLS and looking to see if anyone has an upcoming deal or an Off-Market deal. I currently invest in the Whittier area and will expand throughout Southern California.

I was born and raised in LA so know the good parts of zip codes.

I have never invested in a property with an assumption that appreciation will be a factor in the deal, however, I have been able to pay off all credit debt, school loans, and remodel homes with equity from appreciation. I have used refi's and HELOC's from Los Angeles properties for down payments on future properties. Cashflow does not meet the 2% mark but your cash on cash ROI can be infinite. FHA loans are also an option and I have used it to invest in deals (you have to make one unit your "primary residence")

The cons that I am looking at right now is finding a multi-property deal that makes sense. I am now looking out of state but if a deal makes sense in Los Angeles, I will jump on it. 

@Felix Esqueda

I have a similar story - I have degrees from private universities and accumulated $450K in student loans. I delayed payments with the purpose of investing my cash in real estate. Over the years, appreciation and cash flow were able to pay off all student loans. In saying that, I would not use your hard earned cash on chiropractor school but instead, find an asset that would pay for your schooling. Best of Luck! 

"The Greatest Salesman in the World" by Og Mandino. Short read and all about human behavior and mindset. I would encourage you to read on self-beliefs and motivation. It will become a habit and has to be part of your everyday life. 

Rental Property books are secondary because this site and podcast can cover current trends and how to put ideas into practice.  Best of Luck! 

Not implementing Lease agreements (rent due date) with inherited tenants that were used to bad habits from the previous owner.

- Stick to your Lease

- Follow with Fidelity

@Felix Esqueda

https://www.meetup.com/rich-dad-cashflow/

This is a great meet up that is next Tuesday in Rosemead. There are a few of them that revolve around Kyosaki's books and are great for playing Cashflow and networking.