HELOC as a starting point to the BRRR Strategy for a first time home investor?

[David Weeks]

Hello All,

I hope this post finds everyone well and ready for this upcoming Fall! I'm just getting started on my investing journey and I was discussing this HELOC as an option to getting started. What are the pros and cons that I should be considering. From the research I've done so far I was able to see an avg of around 9% which seems higher than the current 30yr fixed rate. Definitely riskier being that if the first deal fails I am responsible for both loans. What are your thoughts out there? I am currently working at paying down some other debts and monitoring this possible decline in home prices. I want to be timed right and I want to get started. Just exploring some options and seeing what I can learn from all of you amazing investors out there that are inspiring me to get started! I am in the Katy area but I am looking to invest anywhere in the greater Houston metro specifically in smaller multifamily to get started.

[Nicholas L.]

@David Weeks

if you're going to borrow 100% of the funds for a BRRRR purchase, it's going to be very expensive. one thing I've learned is that there are major costs to the BRRRR process that get overlooked, because everyone focuses on purchase price + rehab. the other categories are borrowing, holding, and refinancing - and they add up to tens of thousands of dollars. so you just have to be sure you are totaling up absolutely every expense.