Updated over 1 year ago on . Most recent reply
Conventional vs. HELOC vs. Home Equity Loan
Hello everyone! I am beginning by real estate journey with purchasing my first multi-family home to rent out to section 8. Does anyone have any feedback or thoughts on which loan product to use? I have my primary residence that I have about 450k of equity in. Given that I've been able to find brokers willing to give me a HELOC off my primary residence with a fixed rate are there any drawbacks of using a HELOC instead of a conventional loan vs a home equity loan? I'm thinking the liquidity of the HELOC would be great to pull the trigger on a good deal when it comes and I don't want to pay interest on taking out money I'm not actually using yet since I haven't found a property yet.
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#2 Out of State Investing Contributor
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#2 Out of State Investing Contributor
- Flipper/Rehabber
- Pittsburgh
if you buy something with 100% borrowed money, you will likely be cash flow negative every month. HELOC money is expensive.
you will also need a strategy to be successful in section 8. buying a random property just to 'do a deal' and not having a trusted core 4 will likely result in failure.
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