Lots of Equity... What Should I Do With It?

[Keisha F.]

Hi everyone!

So, I've seen other's post about what to do with their equity but haven't found a strategy that's right for me. I own a 4-unit property in Brooklyn that I bought for $650k and is worth about $1.8M. Excellent credit score and $20k in cash, however, I do have a personal loan right now for $40k from business debt. I want to keep investing and am kicking myself for not figuring out a solid plan sooner when the market was better. I'm looking to invest in Chicago where my family is from but there's not a lot of inventory, I have no experience in renovations, and interest rates are scary. I considered using the BRRRR method but am worried about the after repair value and the renovations.

-Should I use a HELOC to buy a turnkey slightly under market value property for cash, cash out refinance, and repeat?

-Use the HELOC as a down-payment on a property that needs minor updates, cash out refinance, and repeat?

-Or wait until the market turns over, rates go down, and wait until there's more inventory available?

-Or are there any better strategies or suggestions??

Any help is GREATLY appreciated!

[Jay Hinrichs]

Quote from @Carlos Ptriawan:

Quote from @Keisha F.:

Hi everyone!

So, I've seen other's post about what to do with their equity but haven't found a strategy that's right for me. I own a 4-unit property in Brooklyn that I bought for $650k and is worth about $1.8M. Excellent credit score and $20k in cash, however, I do have a personal loan right now for $40k from business debt. I want to keep investing and am kicking myself for not figuring out a solid plan sooner when the market was better. I'm looking to invest in Chicago where my family is from but there's not a lot of inventory, I have no experience in renovations, and interest rates are scary. I considered using the BRRRR method but am worried about the after repair value and the renovations.

-Should I use a HELOC to buy a turnkey slightly under market value property for cash, cash out refinance, and repeat?

-Use the HELOC as a down-payment on a property that needs minor updates, cash out refinance, and repeat?

-Or wait until the market turns over, rates go down, and wait until there's more inventory available?

-Or are there any better strategies or suggestions??

Any help is GREATLY appreciated!

 Wow. If I were you.
1. I would sell and pay for capital gain
2. You have a mil. dolar in cash now
3. Buy property again, start with 25%LTV, DSCR 1.1
4. that may cost you 200-300k
5. For remaining 800k you could do BRRR without needs of DSCR HML
6. Either you use cash-secured 2% loan or do Portfolio LOC by constructing hedged portfolio that yield 6-10% ; loan interest is 6% so pretty much you loan for 0% interest.

to play devils advocate here of course mathematically this all works.. but really what is your experience in construction ??  Nothing riskier on the planet than BRRR from afar.. U made a fantastic purchase you have REAL equity I would be super careful of any leverage or anything else on this asset..
Dont get FOMO going and lever up or sell out only to find yourself with high risk projects..  If you were to sell out ..  Syndicated investments with top shelf operators could be an option.   But going into rehabbing with no experience and from a distance is far to risky in my mind.