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Updated over 11 years ago,

Account Closed
  • Involved In Real Estate
  • Los Angeles, CA
4
Votes |
110
Posts

Plan on using a HELOC to invest in real estate. Should I flip, or buy & hold? (In Los Angeles/So-Cal)

Account Closed
  • Involved In Real Estate
  • Los Angeles, CA
Posted

Long story short: Bought and remodeled my first house last year and loved every minute of it, so I dove into real estate education last year with the plan being to flip homes in LA. I spent most of my cash on my down-payment and remodel, however, with the work I did (and rising home prices) I have developed a good amount of equity in a short time.

I have been approved for a HELOC of (roughly) 150K, which I want to use to invest. I know this can be risky, but I like risk. My father-in-law is also a very experienced agent and former broker with 35 yrs in the business who has been there to guide me and will do my deals. He has supported the idea of using the HELOC.

I sense that the current tone in So-Cal is one of "buy-and-hold is where it's at, flipping is dead." I personally don't feel like flipping is dead in LA at all, especially in the area I've been targeting and researching. I have several friends with very successful flipping companies in LA. Like anything else, it's all about finding the deal.

However, buying and holding multi-family obviously looks good in this climate too. My wife has a 4-plex she about 12 years ago and makes a nice salary off of. It would be great to build a bigger long-term portfolio. Sadly, with 25% down, closing costs and repairs, even with 150k I don't think I'll have enough to invest in multi-family in LA. Also a little wary about investing outside LA, as I'm not familiar enough with the markets. I know this opens up the world of partners and other types of creative financing.

In the end, I wonder what everyone else out there in So-Cal is finding success with at the moment (without giving away any of their secrets of course!). And if anyone has ever used a HELOC in creative real estate investing?

Thanks in advance for your expertise!!

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