All Forum Posts by: David Weeks

I am in the Katy area and not sure if I am too late to join or just learn more about the possible opportunity. One thing that is apparent in real estate is you don't get far alone! Mentorship without gimmicks and solicitation is rare. I'm all ears!

I am interested in BRRRR and learning as much in general about real estate.

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I'll see you there

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Houston, Texas

Quote from @John Cardinale:

I think HELOC's are great options to have. Flexible loans are nice because you can borrow the money for a short period and then return it. For example, borrowing $150,000 for 4 months on your 9% simple interest HELOC would cost you $4500 in interest. That sounds a lot cheaper to me then locking in a cash out for X years at a point lower where you're paying interest even when you don't need to deploy your capital. The savings also assumes you finish timely and put the money back after completing BRRRR.

Hi John,

Thanks for the insight here. I think your point that the time to pay it off limiting exposure to the full interest rate was a great point. I think as the other replies have said ensuring all cost are factored in is key.

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Houston, Texas

Quote from @Darway Dalmeida:

If you can get a HELOC, that's the best way to go. I will tell you thee are better rates out there for HELOCS. Borrowing 150K the other way might cost anywhere from 12-15K on interest and points for 6-10 months. Hard money have helped me gained a lot of properties but they are worst form of money to relied on for starters.

If you have the equity or equities go for it. I did it and still uses mine to this day. It releases pressure on going through with a horrible decision. Keep in mind, I still uses hard money but only if the company have a program that does not charges interest on funds in escrow.

Good luck @David Weeks

Hello Darway,

That is interesting that you prefer that to conventional. I will say that the smaller time period of paying the loan off should mitigate the higher interest rates like John Cardinale said in reply. I think I will continue to do research and keep it in mind as a tool to launch the portfolio.

Thanks

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Houston, Texas

Quote from @Rivers Fike:

A HELOC is going to fall in between your conventional money and hard money cost wise.

The most important thing starting out is to underwrite the deal properly with your financing terms in order to understand whether or not it will work.

Leverage can be very powerful to expand a real estate portfolio, but you have to maintain cashflow while growing.

Hi Rivers,

Thanks for the insight here. I think underwriting is where I need to put more research in. While it involves some of the variable cost, there has to be some rules of thumb I can catch up on!

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Houston, Texas

Quote from @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.

Hi Nicholas,

That is a great point. I know home prices have increased in value about 40% since 2021. I'll definitely work with the small banks I plan to refinance w/ to go over some numbers.

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Houston, Texas

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.

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Houston, Texas

All Forum Posts by: David Weeks

David Weeks has started 1 posts and replied 7 times.

Post: Free wholesale training for new Texas wholesalers?

Post: Space City REI Meetup - May 22nd

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

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

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

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

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