HELOC for velocity banking

[Giovanny Vizcarra]

Hello!

I would like to ask for some input and helpful information, for using a Heloc as a means to paydown mortgages quicker.

I have 4 properties. 3 are rentals, 1 has an attached casita. And my 4th(primary) property

Will be getting a garage conversion for house hacking.

Total monthly cashflow after garage conversion, (which will be $700 monthly) will be 2600.

I have enough capital to pay off 1 of my properties which will increase my cashflow to $3600 monthly, but i think i would like to apply for a HELOC instead and use my capital to add monthly paydown plus any extra income that i bring home monthly. Ive run some numbers and at a 4% rate i have calculated that I can potentially have 2 of my properties completely paid off in 4.1 years. (That would be best case scenario. My question is what are the best banks out there for HELOCS? what is the usual cost of one?

Thanks

[Todd Rasmussen]

@Giovanny Vizcarra

You are aware that velocity banking is just a way to force yourself to pay down extra principal? If you just paid down that principal directly, you will outperform the velocity banking model?

Also, with potential inflation increasing from money injected into circulation and mortgage rates currently at all time lows paying down principal is objectively one of the least efficient uses of your capital?

Providing after considering both of those considerations, velocity banking is still the right option for you... We paid less than $700 for our HELOC and it's through Elements FCU. A few years ago you could get 75% LTV for rate, 85% LTV for rate + 1%, and 95% LTV for rate plus 2%. Info's a little dated by now though. Circa Q4 2017