All Forum Posts by: Polo Vazquez

Bump! I'm eager to see if anyone has some good recommendations. I'm in a similar spot.

By the way, BP has some recommended lenders on the site such as lending one. You can do a search on them on the forums to see what people are saying about these lenders.

Hello BP!

I've been trying to get a HELOC on one of my investment properties that is fully paid off but all the banks and credit unions I've called tell me they only do HELOCs on primary residences. Unfortunately, I owe 80% of my primary home so that wouldn't work.

Any suggestions on companies that offer HELOCS on investment (rental) properties are appreciated.

I've been wanting to do this so that when a good deal comes along I could easily offer cash without having the need to have a big lump sum of money in a bank account with low interest.

Thanks in advance!

Hello Mark! I've been wondering the same exact thing. I was doing 6 months of rent but now that would a substantial amout gaining absolutely no interest.

I know Barclays yields about 2% on their savings account so I've consideres putting it there.

if you to do something like a BRRR or rehab a HELOC might work better because you can buy a property, fix it and refinance or sell it then pay your HELOC loan back until you find another property then you can borrow the money from the HELOC again.

If you want to just buy as many properties as possible all at once then a conventional loan would work better because you take equity out all at once and use it all to buy as many properties as possible.

Downside of a conventional loan is that the interest rate is usually a little higher tha FHA and you can only get a max of 80% equity, BUT if you get FHA then you have to pay mortage insurance for the life of the loan which usually brings your payment up higher than a conventional loan.

Best of luck!

I'm assuming that if you get them with the same bank it should cause no problems. If you get it with different ones then you will have be providing all the info to both banks simultaneously and can a be hazzle. I'm not 100% sure though i've never done it

I use the neightborhood tab on zillow a lot because it tells you if there are any houses listed for rent nearby and houses that have been sold recently. The numbers it gives you are pretty useless. Make sure you do your own research.

I've been using cozy.co. It's pretty simple and works great if all you want to do is collect rent. They can set up automatic payments, buy renters insurance and it reminds them to pay rent

Originally posted by @Guy Yoes:

I guess everyone develops their own plan. I knew nothing about REI when I started 6 years ago. I didn't know about BP and all the strategies. I bought a SFR with some saved money and a HELOC. I put everything back into it and then some. I paid the house off in 18 mo. I found another and with a HELOC and rent and some extra money paid it off in 14 mo. I was learning to manage properties and growing. I bought an auction house and rehab it and put everything into it (2 rents and extra cash) paid it off in 12 mo. I had good cash flow and decided to put it into first position notes. three houses is all I could manage and work full time. People here told me I was stupid to keep 100% equity in my houses.

I retired last year and recently was vacationing at a large resort area. I met a man needing to sell 5 duplexes quickly to cover medical bills for his wife. they appraised at 638K total. He wanted to sell all 5 at once and we agreed on 500K. Because of my equity in the properties, I can 1031X two properties (200K down into 5 duplexes (10 units) and triple my cash flow. 

At this point I am retired with 6 years REI experience and better prepared to manage more properties (all on the same street) and build our dream home on a lake 3 miles from my duplexes. 

Also, as soon as I close the deal, another duplex owner in the area wants to discus with me managing his duplexes (3) on the same street.

I did not take the path of conventional advise (low to no equity), but slowly grew my business and believed that my equity would allow me to take advantage of a great deal somewhere in this journey.  In 6 years, I have acquired 3 properties worth over 300K debt free and 150K in first position notes all from a 75K HELOC and 25K in cash. 

It may not be the way you would do it, but it worked well for me. 

Wow! That's awesome! I was thinking of doing something similar but my plan was to buy 5 properties with leverage then use the extra money from them to start paying the smallest loan off then snowball from there  (Dave Ramsey Style). I'm really exited to hear someone else has done it similarly. I

@Bill Crow I feel like down in south Texas (border towns) nobody requires it and people would be offended if you do, but then again renters insurance is one of those cheap extras you can throw in and they just rather pay it than keep looking for another property. I'm definitely taking it into consideration. 

This is all very helpful information. Thank you guys I had not even thought about renter's insurance. I'll probably just recommend it though. My properties are in Texas which is a landlord friendly state so I shouldn't run into many legal issues of that sort.