HELOC- Lessons Learned?

[Brandon Shaffer]

Hey BP! My wife and I are now up to three properties and are brainstorming some of the creative ways to raise/leverage capital. I have about $160k in equity from my first home and am considering a HELOC in order to hunt down some BRRRRs this year. I'd love to hear some of the success stories in the community on this strategy, and also some lessons learned/cautions that you may have with a HELOC. This will be new for us, so just want to do my due diligence. Any advice is greatly appreciated!

[Justin Phillips]

@Brandon Shaffer My wife and I set-up a first position HELOC on our property, and it's been great! I actually loved the loan so much that I left my job in Medical Sales to join a broker that specializes in them.
The LOC is tied to a ZBA (Zero Balance Sweep Account) checking account. So all of our deposits sweep to the balance of our credit line at midnight. So all of our income/idle funds can go towards bringing that balance down, and saving us interest cost. We retain full access to that equity to pay bills, and make investments. We're going to have our property paid off in 4 years, and we'll retain access to our equity for 30 years. So whenever a deal comes up, we'll simply write a check out of our line and purchase in cash. The best part, each new property pays off quicker than the last with the additional cash flow.

It's been a great tool for us, so I always encourage everyone to educate themselves on the loan.