Today’s first caller has $100,000 available in home equity. Should he use it expand his real estate portfolio, pay off his mortgage, or both? That’s the first question I’m answering on this Q&A Monday!
On today’s show, first we’re going to talk about why trying to time the market isn’t a sustainable strategy. I’m also answering your questions on leveraging funds, getting a HELOC with an LLC, and utilizing equity after a pay cut. Please join me for episode 899 of Investing in Real Estate!
On this episode you’ll learn:
- The best way to leverage $100k.
- What you should consider about getting a HELOC when your property is in an LLC.
- How to find loans when your financial situation has changed.
The Best Way to Leverage $100k
I’m not a financial advisor, but if I had $100k to deploy, I’d certainly be thinking about acquiring performing assets. Here’s why: a rental property is a tax shelter. With depreciation on your side, you’re making some of your money back. When you buy real estate investments, you’re also getting cash flow, and adding an asset to your overall net worth.
If you’ve read my book, you’ll know I’m also a fan of using a HELOC to pay down your mortgage. However, I think it’s important to note that you don’t need a huge chunk of funds to make this strategy work. I’ve seen people use as little as $5-10k to pay off their mortgage.
The best thing about this specific scenario is that you don’t have to choose between buying investments and paying off your mortgage. If you’re strategic, you can work toward both goals simultaneously.
What You Should Consider About Getting a HELOC When Your Property Is in an LLC
In some cases, it can be harder to get a HELOC when your property is in an LLC. However, it’s still possible to find a lender that’s willing to work with you. My first suggestion is to reach out to my friend Dan Kraus at Churchill Mortgage.
How to Find Loans When Your Financial Situation Has Changed
It can be intimidating to ask for a loan if your income has decreased, but there’s no reason not to try. There are so many banks out there looking to lend money. While your income is important, there are also other metrics that factor into the equation like credit score, credit history, debt-to-income ratio, and more. If one lender tells you no, move on to the next one!
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DISCLAIMER: I am not a financial adviser. I only express my opinion based on my experience. Your experience may be different. These videos are for educational and inspirational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. There is no guarantee of gains or losses on investments.
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