Leverage rental property to invest

[Lian Chavda]

Hey all,

I currently own two properties, my primary residence and my first home turned rental which is a townhome/condo purchased in 2017. I am also a real estate agent in the greater Seattle area. I'd like to learn if it's possible to leverage my rental property and equity to either do a flip or BRRR but unsure where to start.

[Robert Kurka]

Hello! One effective method for maximizing the potential of your existing properties is by utilizing a Home Equity Line of Credit (HELOC). A HELOC functions similarly to a checking account, allowing you to withdraw funds at low-interest rates. This enables you to leverage the HELOC for down payments in a strategy known as BRRR (Buy, Rehab, Rent, Refinance, Repeat).

By leveraging the HELOC, you can obtain the necessary funds to make down payments on additional properties. After acquiring these properties, you can renovate and improve them to increase their value. As the properties appreciate and generate rental income, you can then refinance them to access the profits earned through the BRRR strategy.

One notable advantage of using a HELOC is the ability to pay back the borrowed amount gradually. By utilizing the profits from the BRRR investments, you can effectively repay the HELOC over time. This approach allows you to maintain a manageable repayment schedule while capitalizing on the potential returns from your property investments.

Aslo, it's worth considering leveraging your stock portfolios as well. Through a stocks loan, you can access up to 100% of your holdings while benefiting from low-interest rates. This opens up additional opportunities to leverage your investments and diversify your financial portfolio.

In summary, utilizing a Home Equity Line of Credit (HELOC) and leveraging your stock portfolios can serve as powerful tools to leverage your current properties and optimize your financial strategy. With careful planning and prudent investment decisions, you can effectively grow your real estate portfolio and capitalize on the potential returns offered by these investment avenues.