All Forum Posts by: Scott Perry

Hi Matan,

I'm an investor in Carmel, IN. ARV is way off. You are looking at $100 a sqft IF it's move in ready and slightly updated. Therefor MAX ARV is 500k on this house. House down the street is for sale in the high 400s and it's move-in ready with the new kitchen. I have people looking for these types of homes that are ready to buy. PM me if you are interested in selling at a realistic price.

-Scott

Everyone needs a truck... hahaha... but seriously. I just bought my first truck (2012 chevy 4X4 crew cab) a few months ago and I don't know how I've lived without it before. I recommend paying the extra money and getting a 4X4. Also, look for a good used deal. I found mine low miles for 19k. DO NOT BUY A 40k+ NEW TRUCK!!!! #daveramsey

Hi Michael, is this property still available? 

Thanks! 

Scott

Hi Nicholas, 

I have started using Chad from A Step Ahead Management out of Carmel. astephome.com. He has been very good and plan on using his company exclusively. However, he only does single family homes. 

@Scott L. If your 30 year fixed rate has acceleration clause it can be... copied from Google...

An acceleration clause is a contract provision that allows a lender to require a borrower to repay all of an outstanding loan if certain requirements are not met. An acceleration clause outlines the reasons that the lender can demand loan repayment and the repayment required.

Acceleration Clause - Investopedia

Oh I forgot to add.... the HELOC I am getting ready to use is a 4.95% APR. Just for peoples perspective. This is out of a bank in Indiana and they will let you purchase with an 80% LTV

@Brian Shurtleff nice professional start to your BP posts.. "then the smart people come in" (rolling my eyes). Again, if you use your HELOC exactly the same as your mortgage you lose! I agree with this. You MUST use the "all in one" strategy. This means, just as @Kyle N. mentioned, ALL of your income and savings goes into the HELOC. For example, I have 10K cash sitting in my savings account for an emergency fund.... well now that is sitting in the HELOC to reduce principal by 10K until I have an emergency. And yes the loan can be called in and bla bla bla... but so can your 30 year fixed rate (actually just happened last year to my best friends dad on his 30 year fixed). So this is just a simple question of how much risk are you willing to take. Should every investor use this technique? Probably not. It's like the hammer example.... the tool only works if you use it for what it is best for... could you churn butter with a hammer? Maybe.. but it's probably not the best way to do it. To use a HELOC to make a difference you have to....

1. HELOC in first position (meaning you bought the home with a HELOC, oh and no closing costs, 3% savings on this part that no one has mentioned yet)

2. ALL income and reserves MUST be put into the HELOC (again, how much risk are you willing to take)

3. Use your HELOC as a checking account and pay ALL bills out of it. (You could even do the credit card thing and use a CC for purchases and then use the HELOC to pay the balance each month)

The jury is still out for me on this whole "chunking" technique. Haven't thought about it. I am promoting the "All in one" strategy with using the HELOC only to purchase the home.

@Ben Zimmerman I think I see one of the miss conceptions here. "If you get laid off you have a mortgage and a HELOC payment." This is not the case because you would use a Heloc as a mortgage replacement... so if you have 100k property and you take the 80K Heloc you use that 80k to payoff the existing mortgage of 80k. So you would only have your Heloc. Again you have to use this as an "all in one" type thing for it to work where all your income goes back into the Heloc and you pay all our bills out of the Heloc at the end of the months. You are correct. If you take a Heloc thats roughly the same interest rate as a traditional and pay the same amount on both.... the traditional wins every time. Again the only way this works is if you put EVERY liquid asset you have back into the Heloc. You're missing the point if you have a Heloc and keep an emergency fund in your savings account of 30K... you are supposed to put that 30K in your Heloc to bring down the balance and then if you have an emergency you draw on the Heloc. BUT until you have an emergency (if ever) you are fighting down DAILY interest. So if someone is just going to use a Heloc to replace a mortgage and not change their whole financial picture then I would agree that a Heloc is a waste of time.

@JD Martin I agree that people should be extremely careful when deciding to do something like a HELOC. The way it works is that you have to operate at a net gain each month and you also have to have the discipline to not use the paid down line to go buy a new $50k truck. I agree that most people should stick to the traditional mortgage. But I will say that EVERY not some but EVERY investor I have spoken with that uses this "All in one" strategy has found huge success.

@Ben Zimmerman what happens to the $1301 you put on that mortgage? I bet you can't get it back if you have an emergency. What if you could put that money on your mortgage and get it back 15 days later if you needed and still save 15 days of daily interest? Again, it's primarily a daily interest thing.

@JD Martin I second @Brian Cardwell comment. Especially from someone who was "Podcast Guest on Show #243. We are all hopefully here to be better investors and it doesn't matter to me if someone uses a HELOC or not. I'm here to help people who want to investigate it because I have spent so many years confused on the topic and now I am super relieved to finally understand the thing.