All Forum Posts by: Klesta Lamaj

Confirm with your lender and the type of HELOC, but likely no. As long as it is a primary at the time your take out the HELOC you should be good-- that was the case with my HELOC. Floating HELOC rates are typically around prime (but likely higher.) The fixed rates are usually shorter periods (20yr v 30 yr, with a 5 year draw period instead of 10 year.)

Hi Klesta, you've accomplished a lot in a short time. Considering your interest in a buy-and-hold strategy, a HELOC could be an option, but carefully weigh its pros and cons.

A HELOC provides flexibility for renovations and investments, allowing you to diversify with less capital. However, be cautious of potential fluctuations in monthly payments, rising interest rates, and the risk of debt accumulation.

Assess your ability to manage variable rates and potential future changes in your financial situation before making a decision.

You could start with single-family homes to utilize your existing skills and gain experience, then consider transitioning to multi-family units as your portfolio grows and you feel comfortable managing larger properties. Hope this helps!

Equity Extraction Options:
Home Equity Line of Credit (HELOC): Offers flexibility to access funds as needed, similar to a credit card. Interest rates are typically variable and may fluctuate with the market. Ideal for ongoing smaller projects or short-term investments.
Home Equity Loan (HE Loan): Provides a lump sum of cash with a fixed interest rate and fixed monthly payments. Suitable for larger projects or one-time investments.
Cash-Out Refinance: Replaces your existing mortgage with a new loan for a larger amount, allowing you to pocket the difference as cash. Often comes with lower interest rates compared to HELOCs.
Considering your preference for flexibility and continuous projects, a HELOC emerges as a prime choice, providing on-demand access to funds without the binding fixed monthly commitment associated with a HE Loan. Now, regarding property type:Multi-family units align with your aim for robust cash flow and diversification. Yet, given your appreciation for short-term rentals, weigh if managing multiple units fits your schedule and resources effectively. On the flip side, single-family properties, particularly if earmarked for short-term rentals, present an avenue for substantial returns and the chance to leverage your existing expertise. The key lies in aligning your investment strategy with your management capacity and goals.

Taking out equity should be simple if the properties are paid off and you're still working. 
Conventional refi-cashout options are likely the most cost effective way to get funds out.

There are also HELOCs and HELoans available but the rates could be higher and may be variable depending on which you choose.

My recommendation would be to discuss options with a mortgage broker (like myself) and going through the best terms available for what you're looking to accomplish.

Let me know if I can be of any help sorting through your options.

I have been actively buying single family value add rental properties in Columbus, Ohio for the past 2 years. Although I prefer multi-family because it cash flows better. Make sure you are not over-leveraged and have reserves in the bank. If you do that for a while you end up a millionaire pretty quickly

Let me know how I can help.

I just posted on one solution to using resources to expand wealth in a very eficient way at https://www.biggerpockets.com/forums/311/topics/1158003-7-wa...

I favor using smarts not banks, but everyone has their soft spot. I can explain in more detail if it floats your boat.

It appears that you were aggressive with paying off the mortgages.
The issue you will have is that you won't get the same 3% to 3.5% mortgages.
Rates right now are likely around 7% for an investment proeprty.

The issue with HELOC is that it normally has to be on a primary residence and is normally a floating rate. I suppose floating rate is good if you anticipate rates to go down.

Hi Klesta, welcome to BiggerPockets! Your journey in product management and real estate is impressive. Multi-family props bring diversification, while single-family homes offer simplicity. Choose based on your risk tolerance. Best on your ventures!

-Julio