All Forum Posts by: Shanna Gregory
Shanna Gregory has started 1 posts and replied 4 times.
Post: Help! Should I use a HELOC to buy my 1st Investment Property
- Investor
- Atlanta, GA
- Posts 4
- Votes 1
Quote from @Aaron Shoemaker:
@Shanna Gregory- agree that the interest rates are high on HELOCs right now, but so is everything else. And since they usually come with no added fees, HELOCs are still probably the best option for buying your first investment property. That's how my wife and I got started. I think you've nailed step #1!
Thank you Aaron!
Post: Help! Should I use a HELOC to buy my 1st Investment Property
- Investor
- Atlanta, GA
- Posts 4
- Votes 1
Quote from @Dennis Muno:
Quote from @Shanna Gregory:
Hello, I am new to investing. I currently own a home and have acquired some equity and I am looking to take out a HELOC. The plan is to either use this HELOC to buy a property outright for about 30K-50K, rehab it myself and either sell or refinance/rent or I can take the HELOC and use it as a down payment on a more expensive home in a better area that I plan to flip. My question is, Should I use my HELOC for either one of these scenarios and would one idea be better than the other? Thank you in advance for your help.
Hello Shanna,
I would recommend that if you are going to to take money out of a HELOC you buy a property that will cashflow well. I don't know how much a 30-50K house would rent for and even more cashflow(after expenses).
I'm sure if you use the HELOC money for downpayment on a 2-4 unit property that cashflows, the tenants will pay the monthly PITI(principal, interest, taxes and insurance). After a while(6+ months) if you have equity you can pull out of the property you can use that to payoff the HELOC and if there's some money left you can use some of the equity pulled out that remains for downpayment+closing costs for a second property
Post: Help! Should I use a HELOC to buy my 1st Investment Property
- Investor
- Atlanta, GA
- Posts 4
- Votes 1
Quote from @Randy Rodenhouse:
The problem with the HELOC it is based on prime (now at 8.5%) +1% typically so you're talking around 9.5% interest rate so you would have to make at least 10% to break even. It is important to do the math and make sure you understand that you have to get good return on your money or are you simply treading water.
Thank you for the insight Randy. I will definitely make sure I analyze the deal thoroughly before making any decisions.
Post: Help! Should I use a HELOC to buy my 1st Investment Property
- Investor
- Atlanta, GA
- Posts 4
- Votes 1
Hello, I am new to investing. I currently own a home and have acquired some equity and I am looking to take out a HELOC. The plan is to either use this HELOC to buy a property outright for about 30K-50K, rehab it myself and either sell or refinance/rent or I can take the HELOC and use it as a down payment on a more expensive home in a better area that I plan to flip. My question is, Should I use my HELOC for either one of these scenarios and would one idea be better than the other? Thank you in advance for your help.