All Forum Posts by: Justin Phillips

@Ann Lor At the end of the day, the paydown vs. keep cash decision is personal and depends on your risk tolerance. 
My wife and I like to grow while keeping debt and leverage in check. We have a very specialized loan on our rental, it's a line of credit tied to a zero balance sweep account. So we're able to park idle funds and deposits on our remaining balance, saving interest cost. We retain access to that money 24/7, so it just feels like doing our regular banking. The deposits/idle funds work for us, rather than BoA or Well Fargo. 
You could pay down your balance to $0, but still have access to those funds at any time for emergencies or future investment opportunities as they become more common when the market turns. 
It's been a great tool for us, allowing us to make prudent financial decisions, while sleeping well at night. 

@Meir Zafri Have you contested the appraisal amount? You can typically contest, and ask them to consider some additional info, IE: the house that just sold for $250k more. 

@Wyatt Johnson I’d be curious to get more info on it, could you PM me any additional details you have? Even if it doesn’t work for me, I have some contacts in the area. Thanks!

Here's an exhaustive thread on accepting rent upfront, 

Tenants Who Pay a Full Year Upfront (biggerpockets.com)

To save you time: It's almost always a red flag, and putting yourself in a very hard position when the lease (and their money) is up. 

@Al Munevar Welcome Al! I miss Encinitas, go eat a VG donut for me! 

@Larry Fullard My wife and I were faced with the Sell/Keep dilemma, and we decided that keeping our rental, with access to equity was the both of both worlds. We ReFi'd into a specialized 1st position Heloc on our property, known as an "offset mortgage" in other countries. It's a line of credit tied to a zero balance sweep checking account, every deposit lowers the balance and thus saves interest cost. So we can park idle funds/deposits on our line, where they work much harder than savings, tax-free. We have access to our equity for 30 years, so it maximizes flexibility.
We're able to enjoy our monthly cashflow, see appreciation, and are ready for the next opportunity when the market turns.

@Ken Lesiak I'd be happy to assist. Is he good with his money? I only carry one very specialized loan for people that are wise with their money, and spend less than they make. Our average client pays off their home in less than 5 years, without changing spending habits. If he's an investor or aspiring investor, the benefits are numerous as well. Our website is below! 

@Edward Mosqueda My wife and I were faced with the Sell/Keep dilemma, and we decided that keeping our rental, with access to equity was the both of both worlds. We ReFi'd into a specialized 1st position Heloc on our property, known as an "offset mortgage" in other countries. It's a line of credit tied to a zero balance sweep checking account, every deposit lowers the balance and thus saves interest cost. So we can park idle funds/deposits on our line, where they work much harder than savings, tax-free. We have access to our equity for 30 years, so it maximizes flexibility. 
We're able to enjoy our monthly cashflow, see appreciation, and are ready for the next opportunity when the market turns.

@Wyatt Johnson Hi Wyatt, I'm actually typing this to you from Show Low. My family and I came up for a little weekend getaway. Show Low has some very nice communities, golf courses and steakhouses; but it also has some very rundown areas. I'd definitely recommend getting some further info from her.

@Mario Arellano There seems to be a lot of confusion/misinformation here. You can absolutely put Helocs on rentals, I do it all the time.  

To answer your questions directly:

1. There's not an early payoff fee for Helocs, as they're a line or credit rather than a traditional mortgage. 

2. Helocs will almost always come standard with a variable rate. There are options to pay to fix the rate, but that rarely changes the math/makes sense. 

My wife and I have a specialized 1st position Heloc on our rental, called an "Offset mortgage" overseas. It's a line of credit that's tied to a zero balance sweep checking account. Every normal checking deposit we make sweeps towards the balance, lowering the outstanding and thus saving us interest cost. With positive cashflow, it creates a large snowball effect where both our outstanding balance and interest cost are dropping rapidly. We set up our line based of these current inflated values, and we're putting idle funds to work while we wait for the market to turn. When the market turns, we'll simply write a check out of our line to purchase our next investment in cash. The best part, each property purchased using the line pays off faster than the last with the added cashflow. 
There are a ton of benefits around cashflow, flexibility, DTI, and interest savings. I always recommend everyone educate themselves on this style of loan as an option. For those who qualify, it's a powerful financial tool.