DON’T Pay Off Your HELOC Until You Watch This…

Рет қаралды 39,746

Күн бұрын

Episode #877
Got a HELOC? Don’t pay it off…yet! Thinking of house hacking but are discouraged by the low cash flow numbers you’re getting back? Looking to invest in a high property tax state like Texas but are scared to swallow that big expense? All of these topics, and many more, are coming up on this episode of Seeing Greene!
David is back to answer YOUR real estate investing questions with his partner in crime, Rob Abasolo. Today, these two investing experts are going to tackle topics like whether or not to buy a house hack that DOESN’T pay for itself, how to account for the HIGH property taxes in hot real estate markets, whether to keep a property you love or sell it for its huge home equity, how to NEVER work again and the fifteen vs. thirty-year mortgage debate, plus when you should NOT pay off your HELOC (home equity line of credit) early.
Want to ask David a question? If so, submit your question here (www.biggerpockets.com/david?u...) so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot!
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Show notes at: link.chtbl.com/BPRE
00:00 Intro
00:44 Quick Tip
01:09 House Hacking WON'T Work!
04:49 Buy with HIGH Property Taxes?
09:13 Sell or Keep Property with Equity?
14:10 Comment Section Call-Out
16:57 Pay Off HELOC Early?
20:35 15 vs. 30 Year Mortgage
26:30 Send Us Your Question!

Пікірлер: 66

@MrGtronx 5 ай бұрын

how the hell did he get a heloc at 4.5% interest variable as of Jan 2024?? can we find his lender??

@chrystle4108 5 ай бұрын

😂💯

@kellyhou9594 5 ай бұрын

Maybe he put a lot of money down as down payment

@corrom9301 5 ай бұрын

He took it out in 2021 when rates were cheaper. At least that's what I thought I heard.

@om51015 5 ай бұрын

It was a 2yr old question and just made it up the Que 😂

@Tombstone24 5 ай бұрын

Oh boy, love how this started. I have been hesitant to invest into rental property here in north Austin because the rent will barely cover the mortgage, but now i know better. it's a long term investment. thanks to both of you.

@georgelamb1452 5 ай бұрын

That 15-15 strategy is intriguing...but coming up with the down payment for a house every year would be a challenge for me. It sounds like something for someone who has a few rentals that are cash flowing nicely or just has about a $100K of discretionary income that needs to be put somewhere.

@SarastoaQuay 5 ай бұрын

The guy must have low cost of living and excess $$$ to make that work. A normal US family is tight to make a 15 yr work with kids cars mortgage

@Alpha_Anthony 5 ай бұрын

I was assuming he was refinancing the original house to get a down payment?

@michaelmansour6326 5 ай бұрын

Great show today! You are really making me think about the strategy of getting a loan on a fully paid off property, one at a time, and cycling through them for 15 years. Large, Tax-free chucks of cash and the tenant/other properties pay the note back easily. I just so happen to have about 16 properties and most will be paid off in the next few years (purchased (2008, Several 2011-2013, and 2020-2021). While the cash flow will be fantastic, having lumps of cash to use would be huge! My mind is churning...

@KSai207 2 ай бұрын

There is nothing in the world that would lead me to purchase a property under a HOA. I have zero patience for a coven of Karens.

@waneframe 5 ай бұрын

Green is looking like he's hitting the gym hard!

@JonathanExcels 5 ай бұрын

On the heloc, keep every penny on the loan at all times. Draw on the heloc when you need it. You're keeping 10k in an account paying little to no interest while paying interest on a loan balance. My opinion.

@JonathanExcels 4 ай бұрын

@DavidGreene. yes. I watched that video and was talking to my tablet. "Why wouldn't you put every penny on your loan, reducing interest (negative energy), and then if life throws you a curve ball, take out the money you need?". I wouldn't close it, even if it was fully paid off. I didn't think you would actually respond. Thanks. I think our heloc works differently than normal so maybe that's why no one else takes advantage of it the way we do. Closing on our first investment property in a couple days. Using equity from our primary to fund it. Then a cost seg. Then uncle Sam takes less of my money! Thanks BP.

@masterkong369 5 ай бұрын

When I look at a house hack I take the current market rents today and tomorrows expenses then determine if I will cash flow after I leave in a year or two. If it doesn’t cash flow I don’t bother. I also look at low no money down bc primary residence. I view my remainder of the payment as a leased unit.

@romi929 5 ай бұрын

The 15-15 strategy only works for someone who literally has an extremely good W2 income and is able to save a lot of money to put down 20% every year for the next investment property. Most people can’t do this . Most LTR don’t cash flow or negatively cash flow so you definitely need some serious income to pull this off .

@nherrera5239 5 ай бұрын

Haven't watched podcast in a while David looking yoked. Good for you David!

@tammyrussell-rice5508 5 ай бұрын

Correction: Hawaii Property Taxes are lower for Full Time Residents. However, if you own an STR, the rate is only second to what hotels pay. It ain't cheap! I pay $30K for a 12-month period on just one single family residence. Note: Rates will vary from island to island.

@tmdrake 5 ай бұрын

Learning allot from financially stable people.

@tb808 4 ай бұрын

I encountered this until I decided I had to put a bigger downpayment. Then it actually cash flowed

@beatthetrap777 5 ай бұрын

Hey guys how ask a question on the show? Great advice

@geoffwhisner5832 5 ай бұрын

Oh boy. 15 year strategy. Boom! Thanks, guys.

@user-wu3dc2wl8l 5 ай бұрын

Hey, thanks for great content. Got a scenario where i can build either a duplex or triplex on existing property that has a duplex. By adding the triplex to the existing duplex it makes this a commercial property loan when I refi or ever sell later. Plz explain pros and cons.

@swatson5121 5 ай бұрын

I LOVE the strategy you gave Chase, David! I've never thought of that!!

@randyh3094 5 ай бұрын

I love house hacking! My mortgage is $1363 my roommates pay me $2400

@emmuealhird5075 5 ай бұрын

Just stumbled onto you two. What an awesome informative forum. I am about to jump back into real estate investing but was thinking about commercial this time. I have been out of the rental single family market since 2009 when the market tanked in 2008. I'm listening to your channel to get more ideas and now may do both commercial and single family. I need to teach my son who just graduated college and is renting in Nashville, TN. I look forward to learning with you guys. Oh, what do you think of Peter Harris as I was thinking about joining his crew for mentoring in CRE?

@sunlite9759 3 ай бұрын

Figure this one out. My house price value increases $3000/month tax free!

@fredkim01 5 ай бұрын

10:41 why cant you apply 1031 exchange in the 1st option?

@legacyopp9318 5 ай бұрын

Rents are flat or dropping with property taxes going up, eating your net.

@JG-sj3km 4 ай бұрын

Jeff would be better off pulling a heloc on the property he loves and use the heloc to obtain the other 2 properties

@paullightfoot9028 5 ай бұрын

Can you do a CASH OUT REFINANCE, on your rental property that IS NOT OWNER OCCUPIED?????

@michaelmansour6326 5 ай бұрын

Yes, it will be refinanced based on a percentage of new appraisal amount, as an investment property. Many people do this as part of the BRRR method. I did it on my duplex of 9 years a couple years back and used the money to purchase another investment property. The rents easily covered the higher mortgage payment and the new property is now bringing in extra cash flow and appreciating too. Just don't leverage yourself too hard. Good luck

@erikcardero4789 5 ай бұрын

Have a heloc at 8.9% now , would love a 6-7 % here in FL

@rising_crust 5 ай бұрын

Try to see if you can get a 0% balance transfer credit card. Citi is great because they offer cards with transfer options that allow cash to be deposited to a bank account.

@miltonsconstruction1800 5 ай бұрын

On the 15-15 method after you cash out refinance how do you pay back the refinance if you are living off the refinance amount does it come from the rental income? Is the rental income than taxed or written off at a lower rate any clarity is much appreciated I’m currently in contact for my first 10 unit and this sounds solid just need some clarification on how are the cash out refinances get paid back and the tax ramifications for the rental income I’m a frame to finish contractor and I’m doing this for my retirement since contracting has no retirement thanks for your time if you mad it to the end of my question.

@randyrandall2148 5 ай бұрын

This has been my strategy for years but David hasn't really thought it through. It doesn't actually work because of debt to income ratios as well as living expenses coupled with new debt to pay down. In other words, the numbers don't work. Nevertheless, I use the strategy because at the end of 15 years, you have cash flow from 15 properties that can pay for your living expenses.

@David-iy6gh 5 ай бұрын

bro looks jacked bigger David at bigger pockets is getting some bigger gainz 💪

@plmoreno 5 ай бұрын

Great content guys! 👏🏼👏🏼👏🏼

@nickfazzio5277 5 ай бұрын

How does that guy have a 4.5% HELOC? What bank is that with. PLEASE SHARE!!! I have 2 HELOCS with different banks and both of my rates are at 10.25%

@JamesP29 5 ай бұрын

Mine is 11.5% I am wondering the same thing..

@drdetroit5963 5 ай бұрын

Are you guys/gals using paycheck parking to manipulate the average daily balance on your HELOCs?

@Jacobjoyemusic 5 ай бұрын

Same I’m at 10.5%

@shacaracook7174 5 ай бұрын

10.25%? Is that what they're at now? Mine is 5.5% from Citizens bank but I got it in 2022.

@nickfazzio5277 5 ай бұрын

@@shacaracook7174 mine are variable and fluctuate as often as each statement. Does citizens bank do HELOCS on investment properties or just primary home? Thanks

@lancobear3544 4 ай бұрын

Dudes got a resident evil logo on his pillow 🤣

@learypropertygroupllc2830 5 ай бұрын

Always do a 15 year mortgage if numbers don’t pencil to cash flow move on to the next one , keeps ya disciplined , got about 30 properties like this , great to cross colaterize after few years buying more useing leverage of principal built into portfolio to buy more every few years increase monthly cash flow by refinancing if I want building a stronger monthly cash flow as the years go on , just my take on it keeps things ultra tight lots of equity building and a strong portfolio

@Halfflip 5 ай бұрын

I’m a new investor and trying to figure out what loan or what strategies to use in ca? What should I look for in a property? I own a home now there, and wife is a real estate agent. Thank you in advance.

@supermaxr5093 5 ай бұрын

buy out of ca lamo

@poonekar 5 ай бұрын

I noticed you have been in Maui for a while now David. Has that anything to do with the fact that STRs aren’t getting many bookings these days and so you might as well occupy it?

@soundsnags2001 5 ай бұрын

Bigger Pockets helped me a ton over the years, but man its become so incredibly cringe.

@KCMcKeown 5 ай бұрын

Variable rate on a HELOC at 4.5%? Doesn't seem variable to me based on the current bank rates... Is this a very old video? lol

@veronikao3276 5 ай бұрын

Agree. Something does not seem right. Maybe he meant 4.5% plus prime - would be more realistic

@LiquidHydroxide 5 ай бұрын

Could be an introductory rate offered by their lender. 4.5 % is would still be really low for that.

@rising_crust 5 ай бұрын

There are some high yield savings accounts paying 5% right now, and even bonuses for opening an account, so paying off sub-5% debt is suboptimal unless it’s to boost the investor’s credit score or for peace of mind.

@OpusXcigars 5 ай бұрын

I finally found my people

@Erati243 5 ай бұрын

my question is... wtf did brandon go?!

@SMHSavingHomes 5 ай бұрын

Disadvantages of Paying Off Your HELOC: Opportunity Cost: If you use available funds to pay off your HELOC, you might miss out on potential investment opportunities that could yield higher returns. Consider the opportunity cost of using those funds elsewhere. Lack of Liquidity: Using funds to pay off the HELOC reduces your liquidity. If you encounter unexpected expenses or investment opportunities, having available cash or credit can be beneficial. Tax Deduction Impact: Interest paid on a HELOC is often tax-deductible. Paying it off eliminates this deduction, which could have provided tax advantages. Consult with a tax professional to understand the implications.

@crazy3rdgen 4 ай бұрын

Have a heloc that's been jumping every month

@kanakamaoli6508 5 ай бұрын

Mr Greene24 🥰 Looking handsome as always

@Odelle8 5 ай бұрын

Extra principal pay down doesn’t work doesn’t always work like that. It would require a recast for every pay down for it to work like you’re saying it will and most banks don’t allow this. Most additional payments come off the back of the mortgage therefore minimally reducing your monthly.

@hoperules8874 5 ай бұрын

👍🏽💯

@Maydelena 5 ай бұрын

❤❤❤

@ryanmccarty880 5 ай бұрын

first!

@mtinsley 5 ай бұрын

Rob hasn't been providing much value at all as of recently. All he does is agree with David and then even sometimes not emphasize the point David is trying to convey to the viewers. Rather he inserts a dull statement that distracts David's points at times. Or again like I said he just agrees.

@richard-qg9ii 5 ай бұрын

Ultimately he will replace David. That's really what its about. Having 1 familiar faces so #2 can take over one day. Pretty smart I think to keep viewers

@mtinsley 5 ай бұрын

@@richard-qg9ii yeah for sure. I get it. Makes sense. But unfortunately he's not the guy. David was the right guy to succeed Brandon. David added real value while Brandon was there. But Rob isn't that guy. IMO.