All Forum Posts by: Dr. Jordan E Smith

Done! New investor with no current properties and looking to take advantage of the current market

To get started on our first real estate deal, my husband and I are planning on selling our current home which has a small mortgage on it (15% value of home), downsize so we have no mortgage, use some cash from the sale and borrow a HELOC on our new property (in which we'll have 100% equity) to fund our first deals. We have wanted to move to a different area for a year anyway and we're trying to be smart and get started in RE investing at the same time.

All this was moving along nicely and we even found a buyer for our home when the pandemic hit. I would estimate our house decreased in value about 10k recently. Now I'm wondering if we should stay put a little longer and borrow a HELOC on our current home and take advantage of the low interest rates and slightly lower property prices in our area (North GA). But we still want to sell when the market stabilizes again and our house goes back up in value (hopefully), so not sure if we should wait or not.

I've read mixed things on whether you can sell a house with a HELOC on it and if that's even an option. Does it depend on the lender? I would assume you could sell like normal and the mortgage and HELOC would come off the top at closing. Any advice or opinions on what you might do in our shoes would be much appreciated! Thanks!

@Seth Williams Yeah I see what you're saying. I'll run the numbers and go from there. Thanks! 

Hey guys! 

Forgive the newsiness, but I would love your thoughts on taking out a home equity line of credit on a primary residence in order to cover downpayment/closing/rehab costs on a quadruplex. This would be my husband's and my first investment property. We do not currently have a mortgage, so we are also considering the house-hacking option, despite it not being super ideal for our family. 

What would you do if you had equity available, no mortgage (so FHA loan available), and were just starting out ?

House-hack quadruplex or purchase with HELOC at higher downpayment and rent out all units?

Looking for any experience or opinions, thanks! 

@Matt P. I love it! So motivating to hear other people's stories! 

Thanks for sharing :)

@Dave Van Horn I keep hearing that about quads that they are hard to find sometimes but the way to go. 

I also just learned what note investing is. It sounds like a neat way to invest if you know your stuff. 

Thanks so much for the response! 

@Joe Splitrock wow I love what you said there at the end about getting started sooner. I am itching to work out financing with our first rental property and have been analyzing deals in the mean time. I honestly cannot wait to officially become a real estate investor. 

It's so true that sooner is better with any investment and I hadn't really applied that concept to rental properties in my head yet. 

Sounds like your first investment was a great one! 

Thanks for sharing! 

@Dan Shelhamer Cool! Great advice there I appreciate it. We also will go with the 30 year for the same reasons. Those are good returns on a 15 year tho! 

Thanks for the response! 

@Brian Hughes Cool! Yeah sounds like paying the 8-12% for PM right away can save a lot of headaches although I do still intend to learn all the state landlord laws anyway. 

Thanks for the reply! 

@Rob Drum Thanks! It is neat hearing peoples' stories! 

What a great deal getting your first rental with your spouse! lol Seems like the SFRs offer great equity if tended to. 

Def looking at hiring PM right away myself so I can keep seeing patients (and don't get the 3 am phone calls, hopefully). 

Thanks so much for the reply!