All Forum Posts by: Jim Cousino

Greg- Thank you for your insight to my questions! I was unaware of the HELOC retraction by institutions in '08.

Annchen- To clarify... I am quite conservative; fiscally and my original strategy was to pay down my HELOC with the goal of not having any debt against my personal residence (I do not have a mortgage, just the HELOC draw of $109k balance at this time). My natural proclivity is to avoid and eliminate all forms of debt. This is a personal finance approach. I feel the need to draw a distinction here though within the context of investment; I understand the power of wise financing and reasonable and intelligent leverage when approaching real estate investment ("cash-on-cash return"). So; allowing investment LLC's for which I would own in this venture to carry those debts is completely fine and necessary. I hope this helps to clarify my initial post.

Stay well, God Bless, and THANK YOU!

Hello BP community! I am a first time poster/contributor. I have been reading REI books, researching, listening to podcasts, and window shopping. The current times present increased opportunity and as such, I think this (or very shortly) will be an excellent time to jump into this real estate investing. Here's my question:

I don't know how I should structure my financing for my somewhat unique situation- I have a HELOC on my primary residence (equating to $109k, = ~40% of home value); and I have $90K available in cash. To start investing in buy n hold rental real estate; should I:

1) put the $90k into my HELOC to pay it down then use that line of credit ($120k) to finance my deals? (HELOC is variable rate- prime)

2) use the $90k as my investment fund to use for "make-ready" costs, closing costs and 20% down on 30 year mortgages on multiple properties? (fixed rate) 

3) use the $90k to buy property outright, then finance with 30 year mortgage after I take ownership and pay myself back the $90k that way one rental at a time?

The various ways to approach this has me uncertain and nervous. Any insight to my circumstance would certainly be very much appreciated!

Stay well, God Bless, and Thank you!