I got a 50k HELOC now what??

Question

I am getting a 50k HELOC on my personal residence that I will be using to jump start my real estate investing career however, im just curious to what everyone would do with it if they had it. To help paint the picture in my market you can buy 3-1 sfh in class c to c- neighborhoods for 20k-40k or 50k-80k in c+ or b- neighborhoods. B neighborhoods would typically be 80k and up. Personally, I will be making my first deal in the first half of the year but I am having a hard time deciding what kind of price range and area to start with. The C range I would most likely pay cash with the HELOC and try and pay the property down as fast as possible to repeat the process. The C+ or B- and B areas would most likely be a  combination of my HELOC and a partner. I have run the numbers on houses in each of these markets and believe I have some deals waiting for me if I could just pick a strategy. Let me know what you would do  if you had a 50K HELOC to start!

Jaysen Medhurst · Answer

@David Hollenberger, the question isn't so much the price / neighborhood, but what your investing goals are. Do you prioritize cash flow over easier management? Turn-key vs. value-add? Where are you seeing the best ROI?

If it were me, I'd be looking to BRRRR the mid-range properties and considering multi-family, not SFR. That should give you a good blend of cash flow / appreciation and allow you to see some economies of scale.

If you want to share some numbers, the community is always happy to take a look.

Jaysen Medhurst · Answer

@David Hollenberger, if you can do a successful deal with cash that will put you in a good position to use a HML on subsequent deals. They're going to want to see that you know what you're doing and can pull it off.

There are plenty of reputable HMLs here on BP.

David Hollenberger · Answer

@Jaysen Medhurst

My plan is to add value and cash flow I guess I’m just unsure about finding/using a hard money lender or other private funding when necessary.