[USER]

I bought my first single-family home in 2022 for $570,000 with a mortgage rate of 2.3%. I currently owe around $450,000 on the house.

My home value has increased to around $653,000, similar to other homes in the area.

I’m two years out of college, earning $90,000 a year, and have saved $25,000. I’m considering using my home’s equity to fund an investment property.

Has anyone done this? What advice would you offer?

Are there any recommendations without refinancing my mortgage?

[Josh]

I fat fired in 10 years with real estate doing exactly what you want to do.

Go to navy federal credit union (may need a cousin, uncle, dad to join. They do 100% LTV HELOC’s. So, you can keep the 2% primary loan. Mountain American credit union is another one.

Use the full line to pay cash on next rental. Instead of buying 4-5. To help reduce risk.

Use the BRRR method. Fix up rent refinance repeat.
I’m now doing larger properties. Hotels, prisons lol, Hawaii properties etc.

I started with my own home then SFR then duplexes triplexes fourplexes trailer parks the. Hotels.

Just start slow with slow properties and learn every step of the way. And don’t take so much risk that you don’t have a plan B exit strategy. Don’t over extend.

Market is dropping now. So good time Tim get the heloc. Then wait 6-8mths to buy that first rental, when the market is cheaper.

[Bassel]

Don’t do anything with that 2% rate. You may never see that again. You could do HELOC or other line of credit, but consider you’re putting your home at risk if the investment goes bad.

[Phi]

If your rental provides more cashflow than the mortgage and loan then it is worth it.

Just make sure you are able to withstand unexpected maintenance and vacancies

[Lauren]

Congratulations on your smart financial decisions, especially considering you’re only two years out of college!

Leveraging your home’s equity to invest in another property can be a great strategy, but it’s important to weigh the pros and cons carefully.

Increasing your potential for passive income through rental properties and building wealth through real estate appreciation can be benefits but don’t forget you risk increased debt and financial risk, potential for reduced liquidity and management responsibilities associated with rental properties.

Well, before making a decision, consider consulting with a financial advisor to discuss your individual circumstances and goals.

[Ruby]

This is the kind of generational wealth I hope to help my children with! Buying a house while in college is great!

Make sure you have a big enough maintenance and repair fund, tenants will not care for the property the way you would

[Justin]

My advice would be not to use your home’s equity for anything.

[Rob]

Great start but making 90k and owe 450k makes me nervous. Definitely would not pull money out to make your payment higher.

Stay the course and grow organically. You are doing fine.

[Brittney]

I would not use my home equity for anything! I own 4 homes currently and would not use it unless I was in dire need.

[Author]

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