HELOC's make sense currently

[Andrew Atakpo]

Hi Everyone!

Had a question on thoughts on if it makes some sense to do a Heloc to leverage some dollars for an additional rental property purchase?

I have about $200k in equity in my primary residence and am wanting to do something with it if possible. I just refinanced about 6 months ago as well for 2.8% rate, otherwise would look at a cash out refi.

Any options or thoughts are much appreciated!

[Dan Rivers]

I think any type of LOC is great to use for this strategy, either a HELOC of BLOC if possible. I would say that you do also need some cash in case in doesn't fully BRRRR and you need to leave a little money in the deal. You want to be able to pay off the LOC at least 1 month out of a 12 month period usually to show the bank you aren't high risk. I have used this strategy to build our 8 unit portfolio. I know that isn't a large one but we have about $450k in equity and cash flow $3500 month and have had to keep very little of our own money in the deals. It is a good strategy, in my opinion, if done correctly.