How to Use Home Equity to Buy Investment Property (and Retire!)
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- Опубликовано: 17 авг 2024
- Episode #985
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Should you use a HELOC to buy investment property? Would we use home equity to retire? When is it time to sell a performing property and exchange it for a more expensive one? If you’ve got home equity, this episode could help you reach financial freedom faster as we answer real listener questions, many about home equity, on today’s Seeing Greene!
If you’ve been investing for a while, you may have some paid-off properties. Should you get a cash-out refinance and live off the loans? That’s what one of today’s investors is asking, but Rob and David have different views on whether this is a good retirement plan. Did your property almost get destroyed by the city this week? Rob’s did! We’ll share the full story at the start of the show.
Next, an investor debates selling her performing rentals to scale into a bigger property. We also answer how to use a HELOC (home equity line of credit) to quickly grow your real estate portfolio. Why are contractors so hard to find? A veteran investor/contractor shares the reason why most contractors suddenly disappear. Finally, a listener has inherited multiple lots of land but wonders if he should build multifamily rentals on them. Can he use the lots as collateral to get the funds to start his investing journey? All that in this Seeing Greene!
00:00 Intro
01:06 The City is Destroying My Property!
06:12 How to Retire with Home Equity
13:00 Sell Rentals for House Hack?
18:45 How to Use a HELOC to Invest
26:04 Comment Section Callout
28:47 Contractor’s Advice for Investors
35:46 Build Multifamily on Inherited Lots?
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I am in my early 60s and retired at 53. Lots of people gave me pushback because they had difficulty grasping the concept of not working if you don’t have to. I looked at my life as stages. I earned everything I have now through a lot of hard work, but I owe it to myself to “stop and smell the roses” in my final stage of life. In my case I left the country after I retired and live in Latin America. It allowed me to get away from all the negative things happening in America while appreciating my new environment. I have yet to meet anyone who regrets retirement.
Layan Talia Chokr is a conman. All the above comments are from the same scammer.
I have a close friend who is an excellent contractor in the niche, “Apartment remodeling specialist”. After a few years around these places, he now owns multiple apartments of his own. Obtained off market and great deals. Started from the painting trade, worked up to contracting multiple trades. Now has multiple business. And multiple apartment complexes. The trades are of unmeasurable value 👌🏼👌🏼 great advice “become a contractor” 😎
Today I'm on team Bob. I think BP was reading my mind when it comes to this question. Keep investing or spend your earnings? I'm not near retirement yet but apparently I'm in the "middle class trap" according to BP Money podcast lol (great episode btw). This is a perfect discussion on the end game of real estate. At what point can you start to enjoy your assets? I'm at the point of not wanting to own more RE (I have 11 doors and burning out tbh), and getting anxious that all of my money is tied up in RE and stocks, and fully leveraged. At some point, I want to know that I have a ton of equity so I can pull it out with a HELOC or cash-out refi for my "play money". There was another BP podcast with Barbara Corcoran where her advice was put your money in a growing asset, let it appreciate, then pull cash out. "That's when you're rich". That was genius! So go, team Bob! 💪
I like the idea of taking equity out of rental properties with cash out refi-s when you are actively in retirement. This gives you access to large lump sums of cash without losing control/ownership of the assets. You could even do a calculation figuring out how many years of collecting rent it would take to get the 300k you could have now via the cash out refi. If you are older and in retirement, this seems like a viable strategy.
💯❣️
The trades are totally the way to go. I’m attempting to encourage my son to embrace the trades and entrepreneurship. No school loans and ultimate autonomy.
Mid career in banking here. Got a "Good job" and I've been trying to convince myself it's good for 10 years now. Now looking to go into the trades at age 38. That's what all my relatives did and told me not to! Can't wait honestly..
@@tamarrabarnes8462 start building that skill set now so he can be excited.
22:00 What about using a HELOC to purchase the property outright and demo the property and take a 100% new construction loan and pay back to HELOC with that particular loan. Is that a good idea?
I'm in team snob. I get the living large towards the end of the journey sentiment. But I wouldn't leave those hundreds of thousands in cash that is eaten away by a depreciating dollar. So, I would pull out the equity, keep aside ~3-6 months of living large expenses, and the rest in the stock market. But I'm good at ensuring my stock portfolio does not go down during corrections, recessions etc by hedging my positions. If that's not your thing, then put it in gold or whatever else that beats inflation but is also more liquid than RE equity.
Love Seeing Green and have been watching you for a few years. For so many of the questions read on air, you say “if we only had more information” about the listener’s situation to know the nuance of the situation. Can’t there be a person on your podcast team who can reach out to the person submitting the question and get all the information you need to thoroughly answer the question without speculating? You both became millionaires by working hard… let’s work just as hard in getting all the info you need from the person who asks the question so you can give the person and us in the audience the very best answer. Thanks for considering it.
I’m Team “Maxed out on credit so we can’t borrow the $250k Equity in our home” & can’t use it to buy any property
My exact situation 💔I can’t move to scale up ? wtf 😳 do I do 💔🙏🇺🇸🙌🏾🔥👍
Great discussion on using a HELOC to fund a retirement. My take is as long as he can control what he pulls out of the HELOC and lives below his means is a great move. Some people get zealous and get themselves into trouble. Remember the HELOC is still a loan based on the amount drawn and collateralizing your property. So there is risk exposure if your not careful
Pay a property manager to reduce the PITA factor so you offload the headaches. Reinvest the money into more properties to offset the cost increase of the management company.
Leaning towards team Rob on the cash out/retirement. Similar situation for me, although I used some money to buy a cheap 60K home cash that brings in 1100 a month. I used the rest for me.
Do you have it setup as a section 8 property if so what states have $60,000 houses?
Team ROB OR BOB…I would need more details..is it his only rental ?…I am age 70 & sold down to 12 rentals here in n Florida & still flipping homes here & doing some waterfront brokerage…..I love the business & prefer working to sitting on the beach.
Hey David! My name is Boston Caruthers I’m 23 and from WV. I would love to hear you guys doing an episode about how you would go about structuring/creating your own property management/construction company. You talked about how you wish investors would go more into the trades as opposed to always wanting to be agents or lenders. My ultimate goal is to start a property management company within the next year or two. I would love to get your thoughts on this.
Hi Rob, I tried to use a HELOC to add an ADU on a rental property, I didnt end up moving forward because I realized the amount of value I was going to add to the property was not going to be enough to cash out and pay the HELOC back, this because adding an ADU doesn't increase the value of you property as much as it would do adding another room or sqft to the main house. Let me know your thoughts and thanks for your advises!
What I like about you guys and your show is that every time I watch it, I feel smarter and wiser! Thank you for making me better!
I have not started my real estate career as an investor but praying that 2025 will be the year. Just lining all my ducks in a road (in the middle of the road while traffic is moving as the ducks get ready to jump in the water full of crocodiles… it’s Florida! 😂).
That 9 hour drive must have been crazy. I can't even do the 3 hour drive it takes to go to Pattaya from the airport.
Yeah i had an issue with falling behind on my mortgage and cant access my equity the traditional way with both either a heloc or loan and need to free up debt and get out of a ten percent truck payment interest rate! Thwn invest what i can and helo others get their deal going and rinse and repeat
Quickkkkkk tip. Buy insurance before hanging out with David Green because he is always dropping truth bombs. 💣.
What is the helmet symbol on David Greens mic?
Team bob. Thats always the goal for me get in and get out.ASAP.
Team Bob!
My husband and I turn 65 this year. I hear Bob and tax free money is the best. We are on our third remodel in 4years. We are getting less capable. At some point living off our equity is a plan.
I am from Rhode Island’s
david should upgrade his camera or recording settings...he's at like 15 frames per second lol
I’m team Rob. Live off cashflow and the principle
What about a 1031 to a DST? That way you get tax deferral, a little cash flow, and hopefully appreciation while retiring from active landlording. Am I missing a downside to this exchange investment?
Great video
First ment ❤
Reverse mortgage
I do handyman work in Rhode Island
Ok
Ha! I'm from RI...lol
Not knowing Cormac Mcarthy etc was really surprising. I knew every one of em. Guys need to read more fiction.
What the hell could go wrong?
I normally don’t comment, but I had to comment on David not knowing Viola Davis very uncultured
Sorry Rob, the fact that you were blind-sided by that situation takes a toll on your credibility. I only own 4 properties, but I am fully aware and on top of how the municipality operates and handles run-down properties. You should have known.
Why will anyone use their equity to buy a place to live for someone else 😂😂😂 ??? ... Now you are deeper in debt and fully dependent on a total stranger to pay it back .
Team Rob ❤❤