Tag Archive for: HELOC

How can a HELOC help you?

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How can a HELOC help you? A HELOC, or Home Equity Line of Credit, is like having a financial tool in your back pocket. It helps you tap into your home’s equity and use it for things that matter most. Whether you’re upgrading your property, tackling unexpected expenses, or funding your next investment, a HELOC gives you flexibility.

Imagine this: you’re an investor who spots a great deal on a rental property. You don’t want to miss out, but you need funds fast. With a HELOC, you can pull cash from your primary home’s equity to close the deal. Or maybe you’re fixing up a property to flip—using a HELOC for renovations can help you add value without taking on high-interest debt.

The best part? You only pay interest on what you use. So, if you open a HELOC for $50,000 but only spend $20,000, you’ll only pay interest on that $20,000. It’s a flexible and cost-effective way to access funds when you need them most.

In short, a HELOC can be your secret weapon to grow your investments or cover life’s big expenses without straining your budget. Ready to see how it could work for you?

Contact Us Today! 

Is a HELOC right for you? Contact us today to find out more and learn about your different financing options.

Free Tools For You! 

We also have free tools available! Download the HELOC Questionnaire to see if a HELOC is right for you.

Learn more!

Visit our YouTube channel to learn more about real estate investing and how you can get on the fast track to success! 

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The Six Money Buckets You Need in Real Estate Investing

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The Six Money Buckets You Need in Real Estate Investing

As a real estate investor, it’s crucial to always be ready for opportunities. Successful investors have two key secrets: always looking for properties and being prepared to buy them. Now, let’s dive into the six money buckets that help them stay ready.

1. Other People’s Money (OPM)

Firstly, consider Other People’s Money (OPM). This includes family, friends, and other investors. They can lend you money without credit or income checks. For example, if you need $20,000 for a down payment, you can call someone from your OPM bucket. You might offer them a return of 8-12%, which is better than what they’d get from a bank.

2. Home Equity Lines of Credit (HELOCs)

Next, think about Home Equity Lines of Credit (HELOCs). If you have equity in your home or rental properties, a HELOC can be a flexible funding source. For instance, you can use a HELOC to withdraw money for down payments or to fix up properties. The best part is, you only pay interest on what you use.

3. Business Credit Cards

Moreover, business credit cards are a fantastic tool. Unlike personal credit cards, they don’t affect your personal credit score. This helps keep your credit in good shape for future loans. For example, you can use these cards to pay for repairs or other expenses without impacting your credit score.

4. Hard Money Lenders

Then, there are Hard Money Lenders. These lenders don’t focus on your credit or experience. They can lend you more money for flips or 100% for BRRR projects. Because of their flexibility, they are great for deals in remote areas or properties that need significant work.

5. Private Lenders

Additionally, Private Lenders are essential. They provide loans without needing your tax returns. For example, private lenders like Kiavi or RCN Capital might offer 90% of the purchase price and 100% of rehab costs. While they take longer to close, they are less costly than hard money lenders.

6. Local Banks

Finally, don’t forget Local Banks. They usually offer lower rates and fewer points. They might take longer to close, but they can be great for projects that aren’t time-sensitive. For example, if you’re planning a major renovation, a local bank’s loan might be perfect.

Conclusion

In conclusion, having these six money buckets at your disposal can make you a more flexible and prepared investor. Each bucket serves a different purpose and offers unique benefits. By building and maintaining these funding sources, you can ensure you’re always ready to seize opportunities and grow your real estate business.

For more tips and tools, visit The Cash Flow Company. Here, you’ll find resources like our deal analyzer and a detailed guide on money buckets to help you succeed.

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Why You Need to Fill Your Money Buckets

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Why You Need to Fill Your Money Buckets

Always Be Ready

One of our main goals at The Cash Flow Company is to help investors succeed! Top real estate investors have a secret formula. First, they’re always looking for properties. Second, they’re always ready to buy those properties because they have their money buckets filled. Therefore, when opportunity knocks, they are prepared to answer. How can you fill your money buckets? Let’s take a closer look! 

What Are Money Buckets?

Besides searching for properties, the second key to success is having the money ready to buy properties quickly. This brings us to the concept of a “funding stack” or “money buckets”. Top investors have multiple funding options lined up so they can act fast when a deal comes along. Let’s explore the six types of money buckets!

1. Other People’s Money (OPM)

Why Use OPM?

First and foremost, Other People’s Money (OPM) is a powerful tool. To clarify, OPM means borrowing money from friends, family, or other investors. Consequently, they lend you money because they trust you and want a better return on their investment.

Example:

If you need $20,000 for a down payment, OPM can help you get it without a credit check or income proof.

Benefits:

  • No credit checks
  • No income checks
  • Flexible terms

2. Home Equity Lines of Credit (HELOC)

Why Use HELOC?

Another incredibly helpful tool is a HELOC. A HELOC allows you to borrow against the equity in your home or rental property. It’s like having a credit card linked to your property.

Example:

For example, Jane in North Carolina has a paid-off property. She can then get a HELOC to buy fix-and-flip properties. Moreover, she uses a debit card that is linked to her HELOC for purchases at Home Depot.

Benefits:

  • Access funds anytime
  • No need for repeated applications
  • Fast and easy to use

3. Business Credit Cards

Why Use Business Credit Cards?

Business credit cards don’t affect your personal credit score. They are useful for short-term needs like repairs, as well as for small purchases.

Example:

If you need to buy materials for a renovation, use a business credit card instead of a personal credit card. As a result, your personal credit score remains intact and separate from your business expenses.

Benefits:

  • Doesn’t report to personal credit
  • Flexible for small expenses
  • Easy to obtain

4. Hard Money Lenders

Why Use Hard Money Lenders?

Hard money lenders are flexible and don’t focus on your credit score. Instead, they can provide funds quickly for flips, as well as rentals.

Example:

If you find a great flip but need the money in a few days, a hard money lender can provide it faster than a bank.

Benefits:

  • Fast approval and funding
  • Flexible terms
  • Suitable for flips and rentals

5. Private Lenders

Why Use Private Lenders?

Private lenders are like a middle ground between banks and hard money lenders. They not only offer better rates than hard money lenders, but they also require less paperwork than banks.

Example:

Private lenders can give you 90% of the purchase price and 100% of the rehab costs. Consequently, this helps you get started on your project without waiting for bank approvals.

Benefits:

  • Less paperwork
  • Competitive rates
  • Covers most of the purchase and rehab costs

6. Local Banks

Why Use Local Banks?

Local banks offer lines of credit or loans with lower rates. They may take longer to process, but they are ideal for long-term investments.

Example:

If you’re planning a pop-top renovation, a local bank can provide the necessary funds at a lower rate.

Benefits:

  • Lower interest rates
  • Ideal for long-term projects
  • Personalized service

Be Ready for Every Opportunity

In conclusion, by filling your money buckets now it ensures that you’re always ready to seize opportunities in real estate. By having diverse funding sources, you can act fast and get the best deals. Start building your money buckets today, and watch your investment opportunities grow. For more tips and tools, visit The Cash Flow Company. You’ll find tools like our Deal Analyzer and a comprehensive guide to building your funding stack.

Watch our most recent video to find out more about: Why You Need to Fill Your Money Buckets

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Real Estate Investing Success: The Secret Formula Revealed

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Real Estate Investing Success: The Secret Formula Revealed

Real estate investing can be incredibly rewarding, but what’s the secret formula for success? The top investors follow two key principles. First, they are always on the lookout for properties. Second, they ensure they have the funding ready to seize opportunities when they arise. Let’s dive into these secrets and how you can use them to your advantage.

Always Be Looking for Properties

Top investors never stop searching for properties. They know that good deals can appear anytime and anywhere. In order to be successful, you must develop a habit of constantly scanning the market, attending open houses, and networking with real estate agents, as well as wholesalers.

Be Ready with Money

Besides searching for properties, the second key to success is having the money ready to buy properties quickly. This brings us to the concept of a “funding stack.” Top investors have multiple funding options lined up so they can act fast when a deal comes along. Let’s explore these funding options.

1. Other People’s Money (OPM)

Using OPM means borrowing money from family, friends, or other investors. This method often involves no credit checks or income verification. Therefore, if you present a good deal, people will be willing to invest.

Example: Borrow $20,000 from a friend for a down payment, promising an 8-12% return, which is better than the 3-5% they’d get from a bank.

2. Home Equity Line of Credit (HELOC)

A HELOC, or home equity line of credit, allows you to borrow against the equity in your home or rental properties. This is like a credit card where you can withdraw money as needed, making it perfect for down payments, renovations, or purchases.

Example: Use a HELOC to withdraw funds to buy a fixer-upper, then pay it back as you flip and sell the property.

3. Business Credit Cards

Business credit cards are crucial as they offer financial flexibility without affecting your personal credit score. These cards can cover expenses such as materials and labor for your real estate projects.

Example: By using a business credit card for rehab projects, you can in turn avoid the impact on your personal credit score while keeping your finances organized.

4. Hard Money Lenders

Hard money lenders provide short-term loans based on the property’s value rather than personal credit scores. They are more flexible and can close deals quickly. This makes them ideal for flips or urgent purchases.

Example: Secure a hard money loan in order to purchase and renovate a property that is in a remote area. Properties that are more remote are often avoided by traditional banks.

5. Private Lenders

Private lenders are national companies that offer loans without requiring extensive documentation such as tax returns. They often provide up to 90% of the purchase price and can cover 100% of the renovation costs.

Example: Use a private lender to buy a rental property. Then use OPM or a HELOC to cover the down payment and renovation costs.

6. Local Banks

Local banks often have favorable terms for real estate investors. Although they may take longer to process loans, they offer lower rates and can provide lines of credit for future purchases.

Example: Partner with a local bank to secure a line of credit. This gives you the flexibility to buy new properties or cover ongoing project costs.

Building Your Funding Stack

In order to build your funding stack, start with the most flexible options. These include OPM and business credit cards. As you grow you can begin to incorporate HELOCs, hard money lenders, private lenders, and local banks. In doing so, you’ll be prepared for any opportunity that comes your way.

Conclusion

Success in real estate investing comes down to two things: always looking for properties and being ready with the funding to buy them. By building a robust funding stack, you can ensure you’re always prepared to seize the best deals and grow your wealth exponentially.

For more information and resources, visit The Cash Flow Company website. You’ll find tools like our Deal Analyzer and a comprehensive guide to building your funding stack.

Watch our most recent video to find out more about: Real Estate Investing Success: The Secret Formula Revealed

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HELOC vs Cash Out Refinance

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HELOC vs Cash Out Refinance

Are you thinking about tapping into your home equity? If so, you might be wondering whether or not a HELOC or a Cash Out Refinance is the better choice. Both options have their perks, however one may suit your needs better than the other in 2024. Let’s break down the differences to see which option is best for you! 

What is a HELOC?

First and foremost, what is a HELOC? A HELOC is a Home Equity Line of Credit, or an equity line on your property. It operates like a credit card and you can draw from it as needed by using your home as collateral. To clarify, you only pay interest on the amount you borrow, not on the entire line of credit. Here are some key points about HELOCs:

What is a Cash-Out Refinance?

A Cash-Out Refinance on the other hand replaces your existing mortgage with a new, larger one. Therefore, you receive the difference in cash. This option can be helpful if you need a large sum of money and would prefer a single monthly payment. Here are some key points about a cash-Out Refinances:

Which One is Better for You?

Choosing between a HELOC and a Cash-Out Refinance depends on your financial goals and current market conditions. Here are some scenarios to help you decide:

Choose a HELOC if:

  • Low upfront costs.
  • Flexibility in borrowing.
  • You plan to pay off the borrowed amount quickly.
  • Receive 80% to 85% LTV.
  • Interest on mortgage is 3% to 4% and will not be affected by HELOC. 
  • Less paperwork and closing in 1 to 3 weeks.

Choose a Cash-Out Refinance if:

  • You need a large sum of money all at once.
  • Fixed monthly payments.
  • Payments are included within the life of the mortgage.
  • Receive up to 75% LTV.
  • Interest on mortgage will increase to 7%.
  • More paperwork and closing in 3-4 weeks. 

Conclusion

In 2024, a HELOC often provides more flexibility and lower upfront costs than a Cash-Out Refinance. However, your choice should depend on your specific needs and financial situation. Think about your goals, how much money you need, and how quickly you plan to repay the loan. What works best now might not be the best choice in the future. Therefore, always keep an eye on the market and consult with a financial advisor to make an informed decision.By making the right choice, you can save money, reduce stress, and improve your overall financial well-being.

Need More Information?

If you have questions or want more personalized advice, check out our website or give us a call. We’re here to help you make the best financial decision for your future.

Watch our most recent video to find out more about: HELOC vs Cash Out Refinance

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Top 5 Benefits of Using a HELOC

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Top 5 Benefits of Using a HELOC

Are you considering tapping into your home equity? A Home Equity Line of Credit (HELOC) might be the best option for you. Today we are going to discuss the top 5 benefits of using a HELOC. Let’s dive in! 

First and foremost, what is a HELOC?

First and foremost, what is a HELOC? A HELOC is a Home Equity Line of Credit, or an equity line on your property. It operates like a credit card and you can draw from it as needed by using your home as collateral. To clarify, you only pay interest on the amount you borrow, not on the entire line of credit. Here are some key points about HELOCs:

Top 5 Benefits:

1. Lower Costs

A HELOC often costs little to nothing to refinance. This means you can access your home’s equity without the high fees associated with other types of loans. For example, many HELOCs have low or no closing costs if you keep the loan for a few years. This can save you thousands of dollars upfront.

2. More Funds Available

HELOCs usually allow you to borrow a higher percentage of your home’s value compared to Cash-Out Refinances. For instance, while a Cash-Out Refinance might let you borrow up to 75% of your home’s value, a HELOC can allow you to access up to 85%. This means more money is available for your needs, whether it’s for home improvements, debt consolidation, or other expenses.

3. Keep Your Low Mortgage Rate

One of the biggest advantages of a HELOC is that you don’t have to refinance your existing low-rate mortgage into a higher-rate loan. Let’s say you have a mortgage with a 3% interest rate. Refinancing that into a higher rate to get cash out wouldn’t make sense. With a HELOC, you keep your low-rate mortgage separate, avoiding higher interest costs.

4. Fast and Simple

HELOCs are fast and simple to set up, often with less paperwork than a traditional refinance. You can typically get a HELOC approved and funded in a few weeks, whereas a traditional refinance might take longer. This quick access can be crucial if you need funds quickly for an emergency or a time-sensitive project.

5. No Regrets

With a HELOC, you’re not committing to a new long-term, higher-rate mortgage. This can potentially save you money in the long run. For example, if interest rates drop in the future, you won’t be stuck with a high-rate mortgage. You can pay off your HELOC as needed without the long-term commitment.

Conclusion

In conclusion, a HELOC offers lower costs, more funds, the ability to keep your low mortgage rate, a fast and simple setup, and financial flexibility without long-term regrets. If you’re looking for a smart way to use your home’s equity, a HELOC might be the perfect solution. 

If you have questions or want more personalized advice, check out our website or give us a call. We’re here to help you make the best financial decision for your future.

Watch our most recent video to find out more about: Top 5 Benefits of Using a HELOC

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HELOC Vs Cash Out Refi: Which One is Better in 2024?

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HELOC Vs Cash Out Refi: Which One is Better in 2024?

Are you thinking about tapping into your home equity to put more money into your life? If so, you might be wondering whether or not a Home Equity Line of Credit (HELOC) or a Cash-Out Refinance is the best choice for you. Both options have their perks, however one may suit your needs better than the other in 2024. Today we will discuss HELOC Vs Cash Out Refi. Let’s get started by breaking  down the differences and comparing them in order to see which option will put more money into your pocket.

What is a HELOC?

First and foremost, what is a HELOC? A HELOC is a Home Equity Line of Credit, or an equity line on your property. Therefore, it operates like a credit card and you can draw from it as needed by using your home as collateral. To clarify, you only pay interest on the amount you borrow, not on the entire line of credit. Here are some key points about HELOCs:

  • First, Low to no upfront costs: Many HELOCs have little to no initial fees if it is kept for a few years. Even if they do charge, it is normally only in the $400-$500 range.
  • Next, Flexible borrowing: You can borrow as much or as little as you need, as long as you stay within your credit limit.
  • Finally, Variable or fixed rates: Choose a rate that fits your financial plan. There are a variety of options available that can fit your needs.

What is a Cash-Out Refinance?

A Cash-Out Refinance on the other hand replaces your existing mortgage with a new, larger one. Therefore, you receive the difference in cash. This option can be helpful if you need a large sum of money and would prefer a single monthly payment. Here are some key points about a cash-Out Refinances:

  • First, Higher upfront costs: Expect to pay between $3,000 and $8,000 in closing costs.
  • Next, Fixed interest rate: Your new mortgage has a fixed rate, giving you predictable payments.
  • Finally, Longer loan term: You start a new mortgage term, which can be up to 30 years.

5 Benefits of HELOCs

Here are five reasons why a HELOC might be a better choice than a Cash-Out Refinance in 2024:

  1. Lower Costs: It often costs little to nothing to refinance into a HELOC.
  2. More Funds Available: HELOCs usually allow you to borrow a higher percentage of your home’s value compared to Cash-Out Refinances.
  3. Keep Your Low Mortgage Rate: You don’t have to refinance your existing low-rate mortgage into a higher-rate loan.
  4. Fast and Simple: HELOCs are fast and simple to set up, often with less paperwork.
  5. No Regrets: With a HELOC, you’re not committing to a new long-term, higher-rate mortgage, potentially saving you money in the long run.

Which One is Better for You?

When choosing between a HELOC and a Cash-Out Refinance it depends on your financial goals, as well as the current market conditions. Here are some scenarios to help you decide:

Choose a HELOC if:

  • Low upfront costs.
  • Flexibility in borrowing.
  • You plan to pay off the borrowed amount quickly.
  • Receive 80% to 85% LTV.
  • Interest on mortgage is 3% to 4% and will not be affected by HELOC. 
  • Less paperwork and closing in 1 to 3 weeks.

Choose a Cash-Out Refinance if:

  • You need a large sum of money all at once.
  • Fixed monthly payments.
  • Payments are included within the life of the mortgage.
  • Receive up to 75% LTV.
  • Interest on mortgage will increase to 7%.
  • More paperwork and closing in 3-4 weeks. 

Real-Life Example

Today we are going to use the numbers right from David Ramsey’s website. On his website he states that the average debt in America for real estate, car, and credit card totals $290,000. It is important however to understand that these amounts can be even higher for some people. Therefore these numbers can multiply to an even higher number of savings for you depending on your situation. 

Total Debt $290K
Current Mortgage 4%
Total Debt Payments Per Month $2,700 
Savings Goal Per Month $700 

 

Refinance: Mortgage, Car, Credit Card Into One Payment
Interest Rate 7%
Mortgage After Refinance $295K
Savings Goal Per Month $700
Cost Over the Life of the Loan $250K
Cost After Just One Year $113,000

 

HELOC: Take Your Debt and Move it into a Home Equity Line of Credit
Fixed Interest Rate 9%
Consolidate the Car and Credit Cards $57,000
Savings Goal Per Month $700
Cost Over the Life of the Loan $6,000 to $7,000

In sum, a HELOC is usually better for those who want low initial costs and flexible borrowing options. On the other hand, a Cash-Out Refinance might suit you if you need a large sum of money at once and prefer the stability of fixed payments.

Conclusion

In conclusion, a HELOC often provides more flexibility, as well as lower upfront costs than a Cash-Out Refinance will. However, your choice depends on your specific needs and financial situation. Therefore, think about your goals, how much money you need, and how quickly you plan to repay the loan. Most importantly, remember that interest rates and market conditions can change. What works best now might not be the best choice in the future. Always keep an eye on the market and consult with a financial advisor to make an informed decision.By making the right choice, you can save money, reduce stress, and improve your overall financial well-being.

Need More Information?

If you have questions or want more personalized advice, check out our website or give us a call. We’re here to help you make the best financial decision for your future.

Watch our most recent video to find out more about: HELOC Vs Cash Out Refi: Which One is Better in 2024?

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What is a HELOC?

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What is a HELOC?

Today we are going to discuss not only what a HELOC is, but how it can help you succeed in real estate investing. Here at The Cash Flow Company, we always strive to make investing easier for you. One tool that can significantly help is the HELOC. To clarify, a HELOC stands for a Home Equity Line of Credit. It  is essential for making real estate investing simpler, faster, and more affordable. By opening this account, you gain flexibility, allowing you to fund deals yourself or secure contracts quickly. In fact, it’s surprising that not all investors have a HELOC on at least one of their properties. The benefits are so apparent that it’s wild that more people don’t use them. Let’s dive in! 

What is a HELOC?

Again, a HELOC, or Home Equity Line of Credit, and is like a big credit card for your home. It lets you borrow against the equity in your property. This can be your own home or a rental property. To clarify, you can get a HELOC on a home with no mortgage or even one that already has a mortgage.

How Does it Work?

Think of it as a revolving line of credit, much like a credit card. Here are the steps to use it:

  1. Get Approved: Apply at a bank or credit union.
  2. Draw Period: Use the funds for up to 10 years. You can pay it back and use it again, just like a credit card.
  3. Flexibility: Use it for down payments, purchases, or even repairs.

Examples:

Example 1:
Imagine you own a property worth $300,000 and get a HELOC for $200,000. You find a great deal on another property for $150,000. You can use your HELOC to buy it quickly, without waiting for a traditional loan approval.

Example 2:
Let’s say you own a property worth $400,000 and owe $250,000 on it. You get a HELOC for $75,000. Someone comes to you with a good deal on a property for $75,000. You can write a check from your HELOC and buy it immediately.

Apply today!

In conclusion, this resource can be a powerful tool for real estate investors. By offering flexibility, lower costs, and speed, it makes investing easier and more efficient. Therefore, if you want to streamline your investing process, consider setting it up. today. With the right strategy, you can use your home equity to seize opportunities quickly and grow your wealth faster. Visit our website to explore your options and get started today.

Watch our most recent video to find out more!

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HELOC: Make Real Estate Investing Easier, Faster, and Cheaper

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HELOC: Make Real Estate Investing Easier, Faster, and Cheaper

At The Cash Flow Company, we always strive to make investing easier for you. One tool that can significantly help is the HELOC. A HELOC, or Home Equity Line of Credit, is essential for making real estate investing simpler, faster, and more cheaper. Therefore, by opening a HELOC, you gain flexibility, allowing you to fund deals yourself or secure contracts quickly. In fact, it’s surprising that not all investors have a HELOC on at least one of their properties. The benefits are so apparent that it’s wild more people don’t use them. Let’s dive into why a HELOC is a game-changer for real estate investors.

What is a HELOC?

A HELOC, or Home Equity Line of Credit, is like a big credit card for your home. It lets you borrow against the equity in your property. This can be your own home or a rental property. To clarify, you can get a HELOC on a home with no mortgage or even one that already has a mortgage.

Why Use a HELOC for Real Estate Investing?

Using a HELOC can make your investing journey easier, faster, and cheaper. Here’s how:

  1. Flexibility: Access funds whenever you need them. You can write a check or wire money instantly.
  2. Lower Costs: Save on interest rates, fees, and other costs associated with traditional loans.
  3. Speed: No waiting for loan approval. Be a true cash buyer and grab deals quickly.

How Does a HELOC Work?

Think of a HELOC as a revolving line of credit, much like a credit card. Here are the steps to use it:

  1. Get Approved: Apply at a bank or credit union.
  2. Draw Period: Use the funds for up to 10 years. You can pay it back and use it again, just like a credit card.
  3. Flexibility: Use it for down payments, purchases, or even repairs.

Examples of HELOCs in Action

Example 1:
Imagine you own a property worth $300,000 and get a HELOC for $200,000. You find a great deal on another property for $150,000. You can use your HELOC to buy it quickly, without waiting for a traditional loan approval.

Example 2:
Let’s say you own a property worth $400,000 and owe $250,000 on it. You get a HELOC for $75,000. Someone comes to you with a good deal on a property for $75,000. You can write a check from your HELOC and buy it immediately.

Benefits of a HELOC

First, Lower Interest Rates: Typically lower than credit cards and even some private loans. For example, while credit cards can have rates in the 20s, HELOCs often have rates around 8-9%.

Second, No Extra Fees: Save on appraisals, underwriting, and other processing fees. This can save you thousands of dollars per deal.

Third, Convenience: Use checks or debit cards linked to your HELOC for quick access to funds.

Why Aren’t More Investors Using HELOCs?

Many investors don’t use HELOCs because they find them confusing. But, with a bit of understanding, they can see how beneficial it can be. Even a small HELOC can cover down payments or monthly payments, making investing smoother.

How Much Can You Get with a HELOC?

The amount you can borrow depends on your property’s value and the current economy. Banks might lend up to 80-90% of your home’s value. Even if you start with a lower amount, you can always refinance later as the economy improves.

Setting Up Your HELOC

  1. Pay Down One Property: Focus on reducing the mortgage on one property to free up equity.
  2. Apply for a HELOC: Once you have enough equity, apply for a HELOC to use for future investments.

HELOC Tools and Resources

At The Cash Flow Company, we provide a HELOC questionnaire to help you determine the best options for you. Visit our website and check under the Tools section.

Apply for a HELOC today!

In conclusion, a HELOC can be a powerful tool for real estate investors. By not only offering flexibility and lower costs, but speed as well, it makes investing easier and more efficient. Therefore, if you want to streamline your investing process, consider setting up a HELOC. With the right strategy, you can use your home equity to seize opportunities quickly and grow your wealth faster. Visit our website to explore HELOC options and get started today.

Watch our most recent video: HELOC: Make Real Estate Investing Easier, Faster, and Cheaper

 

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The Key to Creating Leverage

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The Key to Creating Leverage

Today we are going to discuss the key to creating leverage in real estate investing. Here at The Cash Flow Company, we see success from the money side because money is the key factor in real estate. In regards to the foundation of this business, it is imperative that you have the leverage you need in order to build your portfolio. What is the trick that can help you accelerate your success? Let’s take a closer look!

Taking care of your leverage.

How can people take care of their leverage on certain properties or on their portfolio? Whether there are two properties or 10 properties, it is important to create leverage over someone else. This can be accomplished by picking one property and focusing on paying it down quickly. In doing so, it will free up the equity in that property, and will provide you more leverage. 

What is the benefit to paying one property off?

By paying down or off one property within your portfolio, you can then get a line of credit or a HELOC on the property. This provides the leverage you need to invest in other deals. We have seen a number of clients who are able to invest in new deals quickly because they had free cash flow. Just to clarify, we are not talking about these clients having money in their pocket. To say it another way, by either paying off a property completely or paying it down to a lower loan to value, you create more options for leverage. How can you take advantage of this additional leverage? One of the options is a HELOC. A HELOC is a Home Equity Line of Credit. Investors can take out a HELOC on the paid off property in order to take advantage of great deals quickly and easily. 

Free up the equity and create more leverage! 

In the world of leverage, an LTV of 75% does not free up any equity. This is due to the fact that investors are paying down each property equally as opposed to paying a little more towards a single property. For example, if there was a deal available for $150K, you would not have enough equity available to purchase the property. Just to clarify, lenders will not lend over 75% on an investment property. How can you set yourself up for success and use the equity in your properties? The answer is by focusing on paying one property down faster. In doing so, you will in turn free up the equity and create more leverage. Remember, those who will accelerate in this business are those who create financial flexibility. 

Contact us today! 

Use your equity to your advantage! Do you need some guidance on where to get started? Here at The Cash Flow Company we can help you get on the path to success! Contact us today to find out more about the The Key to Creating Leverage

Watch our most recent video to learn more about The Key to Creating Leverage.

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