Tapping into home equity

[Harpreet Walia]

All, 

I love investing in real estate with the idea of financial freedom in next 7-8 yrs (owning 25 properties to be specific)

I have started my path towards my goal (around a year back) and currently owns around 5 SFH (buy and hold)

I am currently doing this using my hard earned money. But i dont want to use my own money now (as I read through biggerpockets the power of leverage becomes more clear)

I want to tap into equity of my current primary residence and take out a heloc (dont want to refinance as my existing interest rate will no longer be around). Currently, i am eligible to get a heloc of around 80-85k. 

Idea is to use heloc (and follow BRRR) strategy to keep buying more properties. (Mostly out of state)

I have already read through various posts on how to leverage heloc/refinance options. 

Just putting this question out here again. 

1) What are all things that I should keep in mind before I follow this? 

2) Should I buy all cash deals (BRRR) or use 80k to buy 3-4 conventional loan properties (buy and hold)?

3) Any other idea that you can point to better use my equity

4) Does my strategy looks ok with the overall plan on buying 25 properties in 7-8 yrs?

Any response will be appreciated

[Casey Mericle]

@Harpreet Walia I would urge you to research owner financing, contract for deed, lease purchase, lease option, option, sandwich leasing, etc.  I think you'll find a whole new world of possibilities.  

Essentially terms deals work like this, instead of using the banks money, a private lenders money, or a hard-money lenders money to finance a purchase you use the owner/sellers equity. 

You likely won't hear of these types of deals from many realtors, because most of them (but certainly not all of them) only know two ways to make a deal.  1) all cash 2) bank/private financing

A terms deal for acquiring 25 properties at once could look like this.  You find a package of 25 properties (maybe more maybe less) you work out an agreement with the owner/seller that you'll use your $80K (or less if you can negotiate well) as a down payment to do one of the terms deals discussed above.  You make a spread on what you pay the seller every month and the rent you collect.  

That's the concept at a very high level.  If you'd like to find more about it I learned from courses and books from guys like Jack Miller, Jack Shea, & Peter Fortunato.  You might Google those names and see what you kind of education you can find.  BP also has a wealth of free information on the topic.