All Forum Posts by: Brittney N.

Hello All,

I need help!!!! How do you investors make your numbers work when using a HELOC as a down payment!!!! I am newbie to Multi Family investments and I just don't understand where these "good deals are coming from".

I see so many posts that say leverage a HELOC for a down payment on a rental investment property but every time I run the numbers the ROI is less than 2% and even negative. I am using the Rental Property calculator and have run multiple scenarios and still have yet to find a scenario that makes a purchase worth while. The purchase price of duplexes and quadplexes seem good on the surface but once I enter them in the calculator it's non favorable. How are you investors able to get favorable numbers WITH taking in account a HELOC payment and mortgage payment.

Example attached (link below) and inputs assumptions below. Please note all my assumptions are very conservative since I am a newbie.

Asking Price/Purchase Price: $172,000 (assuming full price for worst case scenario)

Annual Taxes: $3500

Closing Costs: $5000

Est. Repair Costs: $2500

Down Payment: 25%

Interest Rate: 6.1% - 30 Years Loan

Rent: $2350 (current)

Water and Sewer: $150 monthly

Garbage: $100 monthly

Insurance: $200

Other: $275 (this is my HELOC payment assumption)

Vacancy: 5%

R&M: 7%

CAPEX: 7%

PM Fee: 10%

Annual Income Growth: 2%

Annual PV Growth: 2%

Annual exp. Growth: 2%

Sales Expense: 9%

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Hello All,

I need help!!!! How do you investors make your numbers work when using a HELOC as a down payment!!!! I am newbie to Multi Family investments and I just don't understand where these "good deals are coming from".

I see so many posts that say leverage a HELOC for a down payment on a rental investment property but every time I run the numbers the ROI is less than 2% and even negative. I am using the Rental Property calculator and have run multiple scenarios and still have yet to find a scenario that makes a purchase worth while. The purchase price of duplexes and quadplexes seem good on the surface but once I enter them in the calculator it's non favorable. How are you investors able to get favorable numbers WITH taking in account a HELOC payment and mortgage payment.

Example attached (link below) and inputs assumptions below. Please note all my assumptions are very conservative since I am a newbie.

Asking Price/Purchase Price: $172,000 (assuming full price for worst case scenario)

Annual Taxes: $3500

Closing Costs: $5000

Est. Repair Costs: $2500

Down Payment: 25%

Interest Rate: 6.1% - 30 Years Loan

Rent: $2350 (current)

Water and Sewer: $150 monthly

Garbage: $100 monthly

Insurance: $200

Other: $275 (this is my HELOC payment assumption)

Vacancy: 5%

R&M: 7%

CAPEX: 7%

PM Fee: 10%

Annual Income Growth: 2%

Annual PV Growth: 2%

Annual exp. Growth: 2%

Sales Expense: 9%

View report

*This link comes directly from our calculators, based on information input by the member who posted.

@Brandon Sturgill nets 2% is specific to the ROI with mortgage and HELOC payment taken in account for operating expenses. You can DM if this does not make sense. Thanks for the reply.

Hello All,

I am looking to invest in multi-unit investment property. My concern in today's market is finding a good deal. I plan to use money from a HELOC for a down payment to invest in the multi-unit. My concern is the mortgage on the multi-unit PLUS the monthly payment on the HELOC always nets a ROI of about 2% (NOT GOOD) and low cash flow.

I do have SF home free and clear. From a long term investing standpoint, I would love to here from seasoned investors if using the rent from the free and clear SF home to pay the HELOC monthly is a good investment plan in long run? The money from the SF home will essentially just pay the mortgage on the multi-unit and have very little left over cash flow itself.

Hope this makes sense.

@Sherry Patterson you work with yourself at Aspire Realty in regards to mortgages or I assume it was a typo...

Thank you Adam and Sherry

Hello All,

Anyone have any suggestions on investor friendly mortgages lenders, bankers, mortgage brokers in Texas?

I would like to start contacting them for information and prepare to purchase in the New Year.

Thanks in advance. 

Hello: I am looking for a best rate mortgage loan suggestions in Texas. I am looking to acquire a mortgage for a multi-unit investment. I would appreciate bank suggestions for commercial and residential suggestions. 

Please contact me if you can assist or network.

Thank you.

This is great Stacey. Congrats :)

Great article and motivating!