Investment Property HELOC Strategy?

[Pat Jackson]

I have a HELOC on my primary residence in Nevada. I'm investing in SFR in Missouri. My currant goal is to a accumulate 10 SFRs, and then reassess.

I'm trying to figure out the best way to get there. I'm currently doing my first BRRRR, and it looks like I'm going to get all of my money back. I really really like getting a cash flowing property that I own 25% equity in, and all of my money back out in 6 months. The 6 month timeline on title before I refinance is the killer, just the way it is though (without really expensive terms). I'm also exploring delayed financing, but those deals don't come easy.

A lender I'm working with offers up to 4 HELOCs, 1 on a primary residence and 3 on investment properties.  The investment HELOCs allow for drawing against up to 60% of the equity in the home.  AND, if you draw 35k or more, the first 12 months of payments (interest only) you only pay 3.5% in interest.

I'm considering either using the BRRRR (or is the the BARRRR method now) and/or delayed financing to acquire another two properties, then switch from buy and holds to flips. I'd use the flip profits to pay off my three investment homes (worth approximately 90k a piece). 270k x 0.6 = 162k. Borrowing 162k for 12 months would only cost me $5,670. You could do a lot of BARRRing or delayed financing with cash like that.....

Is this idea crazy?  I've read a lot of forum posts, and am currently listening to podcast 107 (I'm going in order).  A lot of people talk about how great HELOCs are, but no one has mentioned striving to get as many as possible as soon as possible.  Thoughts?

[Jack Bobeck]

I cannot remember where it was, but last night there was a great thread (post) about moving heloc money to the LLC and buying the property out of the LLC. The LLC could then do the refi cash out without needing to wait for seasoning. It was late around 1 when I read it, so I may be off base.

The HELOC group I researched for "secondary" homes, I am going to see tomorrow to get all the details. They said there is only a $99 application fee each time I want to pull the money out. I have 3 properties where I can get 75% LTV, as we own them free and clear, looking to do exactly what you said, BRRRR and continue, so long as we can get the HELOC owners to play ball.

At some point this will dry up, it always does, so if you can do it now, enjoy the ride. The idea is not crazy, its sound if you have the equity in the property. Nice job @Pat Jackson