All Forum Posts by: Matt N.

When I say close, I mean go to the bank and pay the balance and tell them that I no longer want the line of credit open.

Hi @Chris Mason,

I am still a little confused about one thing. I have not borrowed any of my HELOC. If I just close it with the bank, then this would not count as a financed property?

Say I rack up 10 financed properties, but pay down a few and close 2 of the HELOCs, I would then be allowed 2 more in the future?

Thanks!

-Matt

Hi Susan,

I have the same question. I bought my first rental house cash and promptly got myself a HELOC. The intention was to buy another house with this money. I actually found a killer deal and never even needed the HELOC. I bought #2 straight cash. Now I'm thinking of taking out HELOC #2 and having that much more buying power to buy an even better #3. I just heard of the 4 or 10 mortgage rule and I don't want to shoot myself in the foot early by using HELOCs to buy cheap houses, then not be able to get a mortgage later for my dream home. I have a few more detailed questions.

1.) Does the HELOC count as a mortgage (I think the answer is yes)

2.) Does a HELOC that is closed still count?

3.) Does a HELOC that I am not borrowing from count? ( I like the idea of having one open for back up money just in case )

4.) How the heck are people doing deals after 4 or 10 loans!! !!! !!!

Thanks and Fat Pockets!

-Matt 

Hi Ryan,

Thanks for responding! I did buy the first place outright, and my app for the HELOC is in. I'm talking about once I buy the second property using the HELOC. My two scenarios are...

1.) Pay the HELOC down to zero over 2 years, saving no cash... and then have 2 outright properties. Then take a HELOC on both properties to buy #3.

or

2.) Pay min (or more) on the HELOC, and save cash for property #3.

I agree, I could model this in excel. I was hoping someone already analyzed one or the other. 

I am a chemical engineer. 

-Matt

Hello!

Black sheep here checking in. A few scholarships and a chemical engineering degree, ramen noodle soup, and PB&Js allowed me to buy the house I live in 1 year after graduation. Then allowed me to buy/fix a rental home outright at 25yrs old. I'm 26 and searching for house #3. No guidance. Lower class parents. 

With help/advice. She could get a great education, great job, and still invest. 

If I could go back and do it allover again, start with community college for 2 years. I saw many friends shoot for lofty degrees and fail... Left with debt and nothing to show for it. Community or cheap college should be stop #1. Then pursue your passion after nabbing a 4.0 in 2 years of minor league college.

-Matt

Hello friends with bigger pockets,

I am looking for feedback on the next step in my investment strategy and was hoping you could help. I am a young engineer who wants to be safe or smart with my money. Not afraid of doing the work other than structural, electrical and major plumbing. Both positive and negative feedback are extremely valuable to me so please comment! 

Here goes. I saved saved saved and bought a 2nd home outright. This is in a low income area, cost was 28k + 4k to fix it, now I'm in it for 32k, comps are ~40k. Rent is already coming in strong at $750/month with tenants who want to stick around. 

Once rented I immediately applied for a HELOC on this property. I'm waiting on the line of credit and searching for rental property #2; in the 30k-40k range after repairs.

First question. Once #2 is up and rented. I could pay off the HELOC in 2 years but that would require me to allocate 100% of the cashflow from both houses. Is this a bad move? My thought is I then will have 2 places, take a bigger HELOC and grow.

2nd question. When do I protect myself with a LLC?

Finally, Please share wins and losses in low income areas. The cashflow is great! I think the hardest part about low income is finding good tenants. Can a cost be associated to that? Also, I'm aiming for big streets, or transportation hubs (subway station, train stops, etc). I think this is my best shot at keeping the cash flowing while having the best odds of appreciating. 

Thanks everyone!

-Matt 

@Jeff, Please add me to your list. I am just starting out but I want to see what is out there!

-Matt

My name is Matt and I am happy to join this site. I just bought my first investment property and now my mouth is watering for more. I look forward to learning from other's in my shoes, as well as, sharing ideas and strategies. I am in the Philadelphia area so I will likely be posting there soon for feedback on my strategy. 

Fat wallets and good day!

-Matt