HELOC Success Story: How a HELOC can snowball your rental portfolio
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- Опубликовано: 30 сен 2024
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HELOC: Home Equity Line of Credit.
Once you have equity in your property, you are allowed to apply for a line of credit which acts as a checkbook. The great thing about this line of credit is you can use it as down payments on rental properties. From there, your portfolio and cashflow can snowball.
The presenters, Bobby and Jenny Whitten, became affiliates of Little Pink Houses of America in 2019.
#HELOC #RealEstateInvesting
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Its important to note that if you're in an appreciation area you can use your HELOC to fix up a rental property and refinance to pay it back. Essentially BRRRR
Idk how that dude does it with that woman interrupting and correcting every little thing he says haha
Thank you for all of the likes we've received so far on this video!
Jesus Christ this couple can’t even get on the same page. Don’t even let each other finish smh 🤦♂️
If I owe 80,000on a mortgage and my interest rate is 3.5% and I get approved heloc for 80,000 at a interest rate of 8% put the whole heloc towards the principal of the mortgage how am I saving $$$ when the Interest rate is higher on the heloc than the mortgage. Please help!!
Yeah that’s where I’m stuck too. Upside would be that you can increase the HELOC by whatever you paid off, and use that to invest in something else that will get returns enough to pay off the HELOC.
Sounds like you'd be robbing Peter to pay Paul in this scenario. To get a better understanding of what you're trying to accomplish, feel free to text me. (904) 454-3830.
@@elMusico221 See my comment in this thread.
Heloc is like a credit card straight percentage. An amortized loan works different. For the first several years your making interest only payments. The difference between the two is what you save which was mentioned in video..
From the banks I spoke to you only pay 1% monthly of what you borrowed from the HELOC and it’s only interest payments. That maybe 10 to 20 years then you pay the principal part. This means their monthly payment for the HELOC cost less then if they had a regular mortgage. Sounds like they also used it to buy more properties which created more income a month to help pay down the HELOC on their first house. Now it may be more costly since the rates are up. Their rate was cheaper so I get what you are saying about the 8% but in this video they are saying spend it on something that makes you money. So, technically you’re not paying for it. Whatever’s making the money is paying for it. I don’t think I would use it to pay my mortgage since I have a 3.5% and the HELOC is higher. They caught it at a great time! I’m definitely getting one to buy more properties.
Who kept coughing. Better to reposition the mic away from him next time or send him across the room.
Homie in the crowd spreading the rona with all that coughing
Lol hope not
Seriously! Walk out into the hallway and hack a lung!
He really wants to be there.😂
🤣🤣
I can’ listen to him coughing without thinking about your comment 🤣
Good video. Just wish the speakers had their story down better before presenting the information. Almost every time the guy would say something, the wife would be like, “Well, you’re leaving out this…”, or “You forgot to mention that…” It’s all good information but it may encourage people who are not in finance to walk away and not take any of the good advice they’re giving. Just my two cents as a mortgage broker.
Sorry about that. They were kind of put on the spot lol.
@@PINKTVchannel I wasn't aware. Duly noted!
Agree, it seems they have applied the HELOC in real life and not only a theoretical opinion. But would be good to have the timeline down to detail to be more understandable. It would be worth it to record again these guys but prepared before hand with the real facts in order.
Thanks for the video. Just getting into rental properties and getting familiar with the benefits of a HELOC.
Love the idea for rental properties, or for purchasing any cash flow assets. However, I've heard this idea of paying for ALL spending with a HELOC, but I have not been able to justify that as a good idea, in my head. Why put utilities, groceries, daily spending, etc on a HELOC when that has a daily percentage interest rate. Doesn't that mean that I am paying more for utilities, groceries, etc??? What am I missing here???
I agree. I feel it's best to put money that you borrow to be put into appreciating assets.
Look up velocity banking. You can do this same method with a credit card also. You’re paying your expenses off each month.
Also, buy some Tax Lien Certifactes. And also 0% introductory credit cards. Then, educate your banker on Tax Lien Certificates. When he likes them as securiety, expansion becomes neer infinite.
we just increased our heloc from 18,000 to 50,000
Awesome! Have any ideas what you're going to do with it?
How did you do that
What bank are you using to finance your investment properties?
I think this would it be better if they use the board to show a clear strategic visual target
Now sep 23, Heloc rate is 7.99%; my mortgage rate is 3.65%, no can pay it off, no no
What’s this couples name. It’s need help using this strategy
Question. They mentioned they bought a duplex, single, then a quad all months apart using the heloc. So they had mortgages for all 3 buildings, and the heloc to pay down using their income and rent money correct? Or does the heloc become first lien on those properties?
From my understanding, ALL income and rent went back to the heloc. Then from the heloc they paid the mortgages.
Are they paying just the interest on the HELOC? How are they paying it down and how long does it take? What happens when the repayment part kicks in?
@PINKTVchannel what their interest + prime now?
That depends on the lender we always recommend shopping when looking at any loan product. Last I checked it was just over 8%
Need to add two steps.
First:
Deposit all the money earned from all sources into Paid Up Additions of a whole life policy instead of on the HELOC.
Next: take a policy loan and then send that to the HELOC. Repeat each month.
Why do it this way
Whole life policy!!!!! You are talking about the worst life ins. Route. People, please triple check your information sources
@@immimis46 you obviously do not know to practice Infinite Banking. The math must be too advanced for you.
This essentially keeps the money in your pocket you paying your self back
Why not max funded IUL? I max funded x 3 yrs and can now access almost all of current cash value
What is their debt service at todays prime? 6.25%
What they are not talking about is the the banks look at HELOCs to impact you're DTI. Debt to income ratio
Yes, and THIS is the info I'm seeking. I own small businesses and do not post myself a high wage for tax purposes. Well the bank didn't like that when I went to get a line against my free and clear property. In fact I was denied because of it...
The less you owe on the HELOC the smaller your monthly payment will be, improving your DTI. If you are throwing all your income into it the balance drops quickly
What is DTI? Thanks!
@@ridermobilenotary5377 Debt to Income (your bills Vs your income)
@@mr.fluffy770 ahhhhhh, thank you. Why didn't I know that ☹️
It’s important to emphasize that you aren’t factoring risk when using a HELOC.
Theres risk in everything
@@Brandon-tz5pnsure. But this is one of the greatest risks you could possibly take.
@@r3volution685 One of the greatest risk you could take would probably be russian roulette lol. If I’m not dying Im doing it. My risk tolerance is extremely high and when it comes to real estate. Because it’s all about numbers. If you take the time to calculate everything then there is no risk.
@@r3volution685 In about a year I should have more properties using my heloc. I’ll check in again and see whether I’m bankrupt or chilling.
Sounds like there buying props were the rents are all mostly going to the debt payment...ok you got rental properties..its now a declining appreciation market....in 5 to 10yrs they may be doing better..but initially this sounds like not much real cash flow ..if your only putting 20% down
Sure the renters are buying that property for you over the long term ..but up front....there may not be much left monthly to change your financial situation ..while you have maintenance and the fun of finding and keeping good tenants
Sounds like you don't have it down yet. You should not try this is not for everyone.
@@patrickjoyner2176 ive already done it many times...theres just better ways to go about it...thanks.
@@joesottilare609 ok would like to hear your part if it's better. Start your own yt channel.
The target is $300 dollars per door minimum cash flow after all expenses. That target is being achieved comfortably and in many deals is easily being doubled. It's work well enough for Bobby to retire from his W2. Of course their are many paths that lead to Rome but this one has worked great for the Whitten's and many other Pink Affiliates. They since have added Multi-Family purchases and STR to their portfolio.
This would be an excellent video IF he let his wife talk more. I love how she filled in a ton of his rambling, I mean “grey areas,” and made the process more approachable. I wish she had her own segment.
lolol i dont think she wanted to lmao
It would have been better to not have her on stage. Yes, he rambled a little and had "gray areas" but her chiming in made it even more apparent instead of masking it. Or they could have coordinated and rehearsed more. Either alternative would have been better. But nothing was more problematic than the guy who kept coughing right next to the mic.
The information was GREAT. HELOs are the way to go.
They were disorganized in their presentation. She kept “butting” in and it took away from everything. There is a power struggle in that home it seems.
Great session for understanding the process. We have one but I ddint understand how to utize it. Thanks very much for sharing your knowledge. We were DINK also and with a huge school loan.
Glad you enjoyed the video. Thanks for your comment.
Unfortunately money is no longer cheap
We're actually doing a video very soon explaining a strategy where bank rates don't matter.
ELPE? Mentioned at 10:22. What does that means. He says everyone were doing them but him.
"ELP" is the Executive Lease Purchase program we coach at our company. More info: ruclips.net/video/aWCiA_Jw2FI/видео.html
THANX GUYS 💯
A always wondered why people who own property want to seem like they have true wealth .when.in fact the bank owns most of it....your true worth your true value. ..is what is actually yours free and clear..not what you own 20% to a banks 80%
You do have to own a handful of rental properties before you can think about trying to live off the rental income. But rentals are more of a 30-year play. Once your tenants have paid off your homes in 30 years, now you're making serious money you can live off of.
Because real estate is an appreciating asset. Yes the bank owns it and the debt is in your name but you don’t financially hold the debt, Your tenants do! Compare that to the millions of people who take out debt for materialistic reasons that doesn’t create cash flow and you’ll see it’s a no brainer. Use debt to create financial wealth, it is the language of the rich and powerful
Where is the spreadsheet
So after you pay off one of ur investment properties say worth 100 grand.would it make Since to close heloc on home you live in so it's free in clear?
If you have paid down the HELOC, it is free and clear. I would say if you have good terms on your HELOC I would keep it available because it's a way to leverage your asset. Remember, you can't spend equity.... equity doesn't buy groceries or pay your medical bills. A HELOC gives you the ability to spend your equity borrowed at good terms. Again it's a tool not a necessity. But if you have it already and it's on good terms, I would say use it and keep it to be used again. Would hate to need it one day and struggle to qualify or have inferior terms and cost yourself more money down the road.
Why would close that? Your equity and liquid capital? Bad idea. Keep it open for emergency and other life uses.
Excellent strategy thank you for posting this 👍🏼
Thank you for watching!
Where’s the link for the full training video??
In the description, but I'll post it here too: www.pinkaffiliates.com/opt-in-82a07bf6-c004-4350-ba6e-1cbadd92a3a3
Thank you
So with Feds raising interest rates every meeting recently, is this still worth it?
I contacted my current credit union and they are quoting prime + 3.5% for HELOC and the interest rate will be around 9% now (late Aug 2022). So with the current interest rate environment, would it be better to take cash out in a refi and use that extra fund to invest in a rental property?
Get a new credit union. Those rates are ridiculous.
Navy Fed is currently charging 8.5%
Too high for good credit. Shop around some more, many people offer prime with no fees to do the heloc
Never refi if you can help it. Don't restart the amortization schedule.
A HELOC used for VelocityBanking and not for liabilities can change your financial horizon.
Doesn't the heloc have variable interest rates? At this point in time, interest rates are so high, is it better to wait to get a heloc until the rates go back down?
That all depends on the lender. I would recommend always hoping around your options when it comes to a heloc. It also boils down to your needs. Sometimes you need the cash to do a deal and even 7% is better than what you would pay raising private funds. Again it's all situational.
The percentage is daily. im assuming that if you treat it as a direct deposit weekly or bi-weekly, there shouldn't be much interest at all, so therefore, ur always paying off the balance.
Heloc open ended correct?
What do you mean by open ended?
Are you thinking about the HELOC being a revolving account?
Please let the wife do future videos. Thanks
total transfer of mortgage to HELOC is not a good idea, HELOC interest is variable.. it may shoot up anytime..
What credit union?
There should be credit unions in your area. Type “local credit union” in google.
He mentioned 100 percent. My two credit unions go 80-90. So I was wondering what credit union he was talking about .
@@kaikal1212 It was a local one they use. Not every bank you find can go to 100. I'll talk to him and see if he can give me the name of it.
@@PINKTVchannel thank you
@@PINKTVchannel interested