All Forum Posts by: Seo Hui Han

Yes, I am all into RE.  But I am also into stocks, and this seems like the best of both worlds.

Also realized I messed up with the YouTube video.

https://www.youtube.com/watch?v=3ZnjNdW3Yck&t=58s

 You're right.  In fact, I'm embarrassed to say that not only is this not anything new, but there's also a YouTube video about this:

@Stetson Oates, Thanks, and you are right, market conditions would limit how much of the initial funds one would be able to withdraw.

I should also add that, while I am not an accountant or tax professional, it appears that at no time in the strategy above would one trigger a taxable event, since you're not selling any stocks or property.  There would be the cashflow from the rental property, of course, but that would be largely mitigated by depreciating the property.

I must have too much time on my hands. Was having a fun, purely academic conversation with someone and somehow the topic went from the stock market, ETF's, to real estate, to BRRR's and either he or I or both us came up with this and wondered is this a legit strategy that others have used?

Here's how it works:

For starters, we are assuming that you have a sizeable stock portfolio.  For argument's sake, and to keep the math simple, let's say you have $1 Million in ETF's or some other safe-ish, well-diversified assets.

Step 1: Take out an SBLOC (Security backed line of credit) on said portfolio. Could be a different product too (Pledge Asset, for example), but basically a loan against your holdings. Let's say you want to stay conservative and only take 50% LTV, or $500,000.00, so that you don't have to sell anything in case of a market correction and there's a margin call.

Step 2:  Purchase a rental property, all-cash, with that $500,000.  Or maybe 450K, because you may need reserves, have to do some reno, etc.  Stabilize and lease up the property.  At this time, you would also be making interest only payments on your SBLOC.  Also at this time, your stock portfolio would continue to increase in value as well.

Step 3: Refinance your rental property. If you're lucky, then after a couple years your property has appreciated, gone up in value (possibly because of rehabs you've done, rents that have been raised, or both). If you get 70% LTV, you would be getting a sizeable chunk of that original $500K back. Or maybe all. Depends on market conditions, interest rates, etc.

Step 4:  Pay back the principal you originally took out on your SBLOC, bringing your leverage balance on your portfolio back to 0.

Step 5:  Repeat.

Opinions?  Is this playing with fire?  Is this so crazy that it might just work?  I imagine if stocks and RE took massive corrections, this might be a recipe for disaster?

Either you or your tenant has to call the police, tell them that someone is trespassing on your private property, you have asked them to leave but they refuse to leave.  DO NOT SAY that they are homeless or appear to be homeless.  If the dispatcher asks first, "Are they homeless?" you have to answer that you do not know or can't be sure.

When the police arrive, tell the officers the same thing you told the dispatcher.  Tell them that this is a constant problem and you are at your wits end as to what to do.  If they are good officers, they will suggest to you that you file a temporary restraining order against them.  If they are crappy officers, then bring up the possibility yourself.  What you are trying to do is get the officers to run ID checks on the homeless, because you cannot file a temporary restraining order unless you have their full legal name, and possible date of birth.

Hopefully, the officer who responds will give you this information.  Once you get it, look up the process for filing a temporary restraining order against that person / those persons, and do it.  The next time the homeless person or persons come, call the police, but this time you say that you have a temporary restraining order on them and they are violating it.  

This will take time, and you will have to rinse and repeat a few times, but it will work to permanently or at least semi-permanently solve your problem. I guarantee it.  I have a gas station in Los Angeles and it is one of the only gas stations within the city where not a single homeless person is at the pumps or at the door or on the lot asking for change.

Whoa this is a good question!

I'm sure that this is one of those "I can't speak to this, all individual investors are in different financial situations, yadda yadda yadda" which I get, sure.  But as someone who is getting ready for a 1031 myself in the next quarter or so, even if someone can answer this with hypothetical, but REALISTIC numbers, I'd like to see an answer to this.

Hey everyone,

My parents have recently told me that their house is too big for them (4 bedrooms) and they would like to downsize to a condo/townhome.  They don't want to sell their home, however, but would rather keep it and turn it into a rental property, esp. since it is in a very good school district.

Their current LTV is like 20%, very high equity. I am currently going through the numbers and trying to figure out how much it would rent for, what kind of maintenance reserve they should keep, etc..

I am attracted to the idea of opening a modestly sized HELOC as a "just in case." However, my concern is: would my parents be committing fraud by getting a HELOC, and then turning their primary into a rental just a few months later? Do we have to disclose this to the lender, either at the time we convert to a rental or even up front when we apply for the HELOC?

 Wow that does look nice.  And a full service car wash to boot.  Out here, the market is DOMINATED by these express, self-service car washes, they have maybe 2 or 3 people working, very cheap.  They're pretty much pushing out the full service car wash model.  

Which gas connection was turned off?  Because in the picture, it looks like the valve is ON (Brown knob on the right end of the yellow flex line).  The pilot is most likely behind that panel (the one on the bottom, with the bulge in the middle).  The panel should come off easily.  There are youtube videos for this.

Sorry, all the other posters are right. There is a difference between a HELOC and a Home Equity Loan, my mistake. And they're also correct about the difficulty in obtaining either without current income.