I Used a HELOC To Buy an Investment Property (Was It a Good Idea?)

In this video I talk about how I personally used a HELOC, Home Equity Line of Credit, to buy a cash flowing investment property! I will be talking about how to use a heloc to buy an investment property! #HELOC #homeequity #investmentproperty

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Time Stamps//
00:00 Introduction
00:52 What is a HELOC?
01:34 Purchasing an Investment Property W/ a HELOC
03:16 THE NUMBERS!!!!
06:10 My Mistakes With a HELOC
08:23 Should YOU use a HELOC to buy an Investment Property?

WHO AM I?
My name is Evan Phoenix and I am a Real Estate fanatic trying to reach financial independence while educating as many people as I can along the way 🤙

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***DISCLAIMER: First off, thank you for all the support. All content from the Evan Phoenix YouTube channel are my own thoughts and opinions. The information from this channel should not be taken as legal of financial advice. Some of the links in the description may be affiliate links where I will benefit from, if you were to click the link and purchase. The links do not include any additional costs to the purchaser.

[JamesWilliam]

Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.

[PSU]

Some lenders let you lock in interest rates 3 or so times a year on your HELOC so if it comes down you can lock it in doesn’t have to be variable all the time. Great advice. Someone mentioned in the comments already but I have to agree self managing will save you money just until that HELOC is paid off.

[caseyadams]

I have my consult for a HELOC this week with a credit union. Looking to buy in OK. I want to buy the property completely in cash, BRRR it, then refinance it to pay the HELOC off. Even with holding the HELOC long term, cash flowing almost $400/month is great. I hope I can slowly build a portfolio with several properties that cash flow like that. Thank you for the transparency!

[dendrxx]

Thank you so much for the insight. I’ve been looking to put my equity in my give to work and this video was very helpful..

[johnnybgood]

It's not an "if, " but "when" question.

Repairs and maintenance

Capital expenditures

Vacancy

Are going to happen whether we like it or not.

I currently own 45 multi-family homes in the Phoenix metro of Arizona and learned the hard way through the years. You must account for these things and set aside reserves

Your expenses are a little light. Either way good job taking action.

Tenants paying down your debt over the years, rent increases and your value increasing with tax benefits this property will be in a good position in a short time

[MoodyWealth]

Love the information!
So the bank required that you do 25% down payment for the terms of your commercial loan I assume. But to produce that capital to close on the duplex.. financed the down payment with capital mostly from the seller finance.
How did you get the seller finance/get the seller to agree to this? This is a key detail in this property purchase.

[kateribeiro]

What are you thoughts on using home equity fixed loan for long term rental? If you buy property by paying for it in full and can refinance down the road? Still saving on closing cost. Assuming there is enough equity to take out.

[jbivphotography]

Pretty solid. I'm hoping to do something like this at some point in my life. Thanks for sharing.

[TrentJohnson-pg]

My rental property has 100k+ equity and is on a 30 year conventional loan. I am trying to use the equity to buy another rental property. I am having trouble finding a lender that will give a HELCO for a rental property.

[joshsimmons]

Question - Why do you pay for any tenant utilities? Ours pays for their own, & it doesn’t affect rents vs. what’s available on the market.

[eddyalmaguer]

At this point, does it make sense to hold off on HELOC given high interest rates? Also, how often does interest rate change on a HELOC? Every quarter? twice a year? I assume it goes down the same that it goes up?

[LeoCampos]

Hi Evan,
Can you please share the name of this program you're using for these calculations?
Thank you.

[stevek]

Ugh all that work for 400 hundred a month...ill work an overtime shift instead....i make more than that off a 75k single family in pittsburgh smh...this deal/numbers dont make sense to me

[sksk]

Is interest paid on a HELOC deductible? some people said its only deductible for main home or second home buy, build, or improve. Other people said buying rental is also deductible, i dont know which one is right

[stanmoney]

I'm hearing HELOCs now have some locked rates !

[falayyou]

Do the tax benefits from interest deduction offset the extremely high interest rate you’re paying that comes out of your cash flow? I would think doing a heloc now with rates where they are is risky if the property doesn’t have extremely high cash flow potential. even then you don’t have much cushion for unforeseen expenses.

[MSHairCandy]

hi what commercial product did you use?

[randycooper]

So, one can rent out the property with it financed with a HELOC? I thought I would have to change it to a conventional mortgage before it can be rented out.

[muhraf]

You have to pay a balloon payment of 60k in 5 years, if you divide it over 60 months (5years) that’s 1000 per month, even if we consider heloc at being 130/month you’re cash flowing about 600. That’s not taking into consideration any repairs. Your mortgage payment is mostly interest maybe 400-500 a month towards principal. You’re most likely loosing money for at least 5 years. That’s a lot of free work for a very long time. Yes you get depreciation that you can right off on you taxes but that’s very nominal (you probably save 200/ month on the high end)

[Frankyblk]

Hey. As for “commercial” comp. Who did you go with?