All Forum Posts by: Christopher Mooney

Quote from @V.G Jason:

Quote from @Christopher Mooney:

Quote from @V.G Jason:

Quote from @Christopher Mooney:

Quote from @V.G Jason:

HELOC is one the dumbest things to consider. Quit leveraging to leverage.

If you don't have the means to speculate, don't play ball. I don't care if the investment is intrinsic day 1, it's still straight speculation. Only people to really fight this notion are guess who? Lenders. No **** sherlock, they got a product to push.

 soooo...I should Dave Ramsey it and pay cash for all my rental properties? Not sure what your constructive suggestion is here. Elaborate for the audience

Where did I say that? Just cause I said a HELOC is dumb doesn't mean I said go all cash, 0 leverage. I doubt your reading comprehension is poor, I bet your sensitivity is high and this got you triggered. Your impulsiveness makes sense on why you think this is a sound idea.

I said quit leveraging to leverage. You're taking leveraged funds(HELOC) to leverage(a house payment). Right?

Instead, go work and earn the 25% down & capable of amount of reserves. And go buy a house that fits this criteria. That's my constructive suggestion. My destructive suggestion is to never start a title with HELOC-the most important things to consider and get mad when someone says quit leveraging to leverage.

Clearly you're the overly sensitive one here when you're ranting and raving about how bad HELOCs are and making poor judgements and assumptions. If it makes you so emotional, best to just avoid the topic and this post

You're the one that can't debate the point with facts & logic. Go ahead and dispute what I have to say. 

If we're debating with logic and facts, awesome I'm onboard. You're probably pretty intelligent, but your communication style detracts from that and could use some refinement.

Back to the point here, we all have to leverage something to leverage traditional financing on a property don't we? You recommend I just work and get the money for 25% down. I value the heck out of hard work so we're in alignment there. But I'm still leveraging my energy and efforts to later leverage a 30 year mortgage on a rental property. I thankfully make pretty good money and can probably save more than the average American could to invest in real estate. It'll still take time to save 25%...so there I'm leveraging my time.  

If rates do the opposite of what the street is predicting, and HELOC rates were to rise, and I can still comfortably cover that higher HELOC rate, and all my other ducks are in a row, why not leverage the equity in my home if other ducks are in a row? You say its the "dumbest strategy", so the guests and hosts on the BP podcast who got their start with HELOCs got lucky? Or is it possible that any strategy can work if done properly?

Quote from @V.G Jason:

Quote from @Christopher Mooney:

Quote from @V.G Jason:

HELOC is one the dumbest things to consider. Quit leveraging to leverage.

If you don't have the means to speculate, don't play ball. I don't care if the investment is intrinsic day 1, it's still straight speculation. Only people to really fight this notion are guess who? Lenders. No **** sherlock, they got a product to push.

 soooo...I should Dave Ramsey it and pay cash for all my rental properties? Not sure what your constructive suggestion is here. Elaborate for the audience

Where did I say that? Just cause I said a HELOC is dumb doesn't mean I said go all cash, 0 leverage. I doubt your reading comprehension is poor, I bet your sensitivity is high and this got you triggered. Your impulsiveness makes sense on why you think this is a sound idea.

I said quit leveraging to leverage. You're taking leveraged funds(HELOC) to leverage(a house payment). Right?

Instead, go work and earn the 25% down & capable of amount of reserves. And go buy a house that fits this criteria. That's my constructive suggestion. My destructive suggestion is to never start a title with HELOC-the most important things to consider and get mad when someone says quit leveraging to leverage.

Clearly you're the overly sensitive one here when you're ranting and raving about how bad HELOCs are and making poor judgements and assumptions. If it makes you so emotional, best to just avoid the topic and this post

Quote from @V.G Jason:

HELOC is one the dumbest things to consider. Quit leveraging to leverage.

If you don't have the means to speculate, don't play ball. I don't care if the investment is intrinsic day 1, it's still straight speculation. Only people to really fight this notion are guess who? Lenders. No **** sherlock, they got a product to push.

 soooo...I should Dave Ramsey it and pay cash for all my rental properties? Not sure what your constructive suggestion is here. Elaborate for the audience

Thanks everyone for the replies! I spoke with my bank who I have my primary mortgage with (Navy Federal), and they echoed most if not all of what everyone said here. They did say there's no prepayment penalty which is nice, but that's just in terms of paying back anything borrowed. I didnt ask about if I closed it prior to ten years, I dont plan to, unless I run into a DTI issue as you mentioned @Jason Potrzeba

@Jason PotrzebaThe only thing I didnt understand when I talked to a mortgage loan officer is how an IO line could have a lower monthly cost than a P&I line. If I'm using $50K of a $100K HELOC, and the APR on the P&I line is 8.75% but the APR is 9.75% on the IO line, I'm still borrowing $50K and pay interest on that...how can the IO payment be less?@Jason Potrzeba

@Ryan Muska thanks for the input! Definitely learned a couple new things here

Hi all,

I'm just starting to research getting a HELOC on my primary residence to use for capital for BRRRR projects. What are some things you wish you knew before using a HELOC for BRRRR? What are the most important things to consider? What often gets overlooked that hurts new investors?

Hi all,

I just got the monthly BP Pro membership so I can analyze properties. I'm just getting started, so don't have too much real data for inputs. Just using any resources I can. But would love people's thoughts on these assumptions for a quick initial analysis before proceeding to the next step:

Closing Costs = 3%

Hard/Private money Interest Rate = 11%

Points charged by lender = 1

Other charges from lenders = 0

Refinance rate = refering to Bankrate.com

Other refinance fees = 2% of refinance purchase price

Typical cap rate for your area = I leave it blank

Electricity = $0

Water = $50/month per unit >> I spend about $35/month at my personal residence for 2 ppl. Rounding up to be conservative

Maintenance = 8% >> older housing stock in Cleveland, OH
Vacancy = 5%
CapEx = 5%
Annual Income, PV, Expenses growth = 2% >> i'm more bullish but keeping these numbers to be conservative

Sales expenses = 2% >> no logic here haha

Any thoughts, input, suggestions are greatly helpful!

I use Blink, I like blink, but I do need Wifi for it to operate. But picks up everything though, almost too much lol

I’ve heard good things about Doorloop. Haven’t used it personally but a good friend of mine who self manages around 20 doors uses it and swears by it. 

Quote from @Peter Sosnow:

@Christopher Mooney

Doing it in CT for 5 years with now 19 properties and 90 units. Cash flow is definitely choppy. My results:

- uncontrollable expenses 20-25% of rental income- utilities, taxes, insurance.

- controllable 15% of income - primarily maintenance - landscaping, snow, plumbing, electric etc.,

- debt payments - 35% of income - P&I

The balance is capex, prop mgmt, miscellaneous and if any left my reserves/cash flow.

Pros - building equity, mucho tax benefits, appreciation, lifestyle

Cons - cash flow choppy, capex can be problematic with deferred maintenance and high costs.

Still think the benefits significantly outweigh the cons for the reasons others here posted.

The journey ain’t easy is it? Thanks for sharing your experiences. Do you see the cash flow increasing over time? Do you feel like you’re on the cusp of better property performance? Any ideas what you could do different in the future for better property performance?