All Forum Posts by: Christopher Ward

You could leverage your HELOC to accelerate payment on your house, then tap into the equity to purchase more investment properties. This is an example of what to do.

Take out a simple interest home equity line at 4.4% (keep in mind that HELOCs usually have a variable rate)

Lets say that's $40,000 and you pay $20,000 of that toward your mortgage. (Accelerating payoff of amortized debt)

Now setup and use your HELOC as your bank account and deposit all of your income into your HELOC. Since you are paying simple daily interest, deposit your income at the beginning of the month, and pay your expenses at the end of the month therefore keeping the balance as low as possible. If you can have a lower balance for a majority of the month, you'll save a great deal on interest.

Allow any surplus to remain in the account to pay down your HELOC balance back to zero. This won't work if you're living paycheck to paycheck. You need some surplus at the end of every month to pay down the principle.

When you reach a zero balance, pay another 20k from your line to the mortgage. Repeat this chunking process until your mortgage is paid off.

When applying this strategy, most people can pay off their 30 year mortgage in 6 - 10 years, even faster in some cases just depending on how long you've had the mortgage when you start.

I work with some banks that do 30 year fixed, first position Lines - allowing you to pay off the mortgage and with the line and have the line in first position.

There is obviously more piece to this so this is the strategy in a nutshell. Feel free to reach out if you'd like more info to learn how to do this.

Thank you guys so far for the replies. Andrew, are you talking about paying off the rental property with that method? If so, I thought aquiring new rental properties was a better use of funds rather than paying off current properties. I could be misinterpreting what you wrote.

I have a new question. If I can aquire a property 100% using HELOC only, should I? Or is the smarter option to use HELOC for the DP and obtain a loan for the remaining amount to purchase the property?

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Hello everyone,

I'm considering using a heloc for a downpayment on my first property, however every time I run the numbers through the rental property calculator, the monthly cash flow in usually under $100. I understand the reason behind this is I have a larger P/I payment which eats into the cash flow. My ROI usually is good due to me only paying closing costs and repairs.

In this situation, is accepting a lower cash flow acceptable if I'm doing it low money down? I know Brandon Turner states $150 to 200 is good monthly cash flow but I believe he factors in a 20% DP when I see him use the calculator.

If I used a heloc, I would refinance into a 30 year loan before the APR rate increases.

Thank you for your time,

Chris

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Thank you both for the information.

@Salvatore Lentini, do you know a James Way up in Doylestown?

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Hello everyone,

I would like to obtain my first rental property next year (fingers crossed).

I currently own a home 100 % clear (worth approximately 160k) and would like to use the equity to fund the down payment for the second property.

I've been researching HELOAN VS cash out refi, and I think the refi is the better option. What is your opinion?

Is it better to pull out only what's needed for the DP or is purchasing property 100% cash the better option?

Do you have any ball park figures on what the cash out refi rate may be for the Burleson TX area? If not, what's a good way to research those numbers? My credit is excellent.

Thanks,

Chris

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Great thank you Jason. Will do.

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Hello BP,

I would like to begin RE investing next year. I own a home 100% clear and my only debt is a monthly car payment. I have a 10k emergency fund and about 5k just sitting in my account.

What are your thoughts on me obtaining a HELOC or HELOAN to fund the down payment and the rest will be on a 30 year mortgage? Is that a decent strategy for financing?

For taxes, I'm thinking of working with a CPA to help me minimize tax liability. I've never itemized my deductions and always done the standard deduction.

Where's a good place to start looking for team members ie. RE agent / investor, good property management companies , good contractors, inspectors, etc?

Thank you everyone. I love the BP site and look forward to being financially free in the future :)

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Thank you

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Thank you

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Hello,

If I would like to rent my SFR for 1600 a month, the minimum requirement would be monthly gross income 3 X 1600 = 4,800.

I'm assuming there's 160 work hours per month ( 4 weeks X 40 hours ).

If they're making 30 per hour gross income, 30 X 160 hours = 4800 monthly income.

If my calculations are correct, Is it okay to tell prospective tenants a $30 per hour steady job is required?

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All Forum Posts by: Christopher Ward

Christopher Ward has started 11 posts and replied 25 times.

Post: Need a Fort Worth Property Manager

Post: Using HELOC as a down payment

Post: Using HELOC as a down payment

Post: Funding strategy for first deal

Post: Funding strategy for first deal

Post: Newbie from Burleson Tx

Post: Newbie from Burleson Tx

Post: Minimum income requirements

Post: Minimum income requirements

Post: Minimum income requirements