Jump to content

All Encompassing Investment and Financial Planning Thread for the Surly 99.5%


Dbeasy

Recommended Posts

10 hours ago, LCHorn said:

I don’t really have any great savings ideas, but what I would recommend is to take out a HELOC on your residence.  It’ll potentially be a source of down-payment money for the next purchase, you won’t be paying interest on it if you do nothing (it’s just an untapped line of credit), the interest is 100% tax deductible if you convert it to a rental property, and no bank will approve it unless the property is owner occupied (in other words, you would need to do it now and not when you’ve moved).  

I see going with a HELOC as an unnecessary risk. If a house is almost paid off or even paid off, why go backwards. I know some argue that there’s no reason to ever get out of debt and find methods to push taxes indefinitely. Grant cardone comes to mind. This can work until it doesn’t, and then the cards fall. In 2008 many had their HELOC loan immediately due because the property value plummeted.

i also see little value in becoming a one house landlord. Either it becomes a lot of work for the owner, or the property mgr takes the profit. If I was in that situation and I wanted to live somewhere else, sell the property and buy the next house for cash. Or a small mortgage.

Link to comment
Share on other sites

19 hours ago, Nice Guy Eddie said:

I see going with a HELOC as an unnecessary risk. If a house is almost paid off or even paid off, why go backwards. I know some argue that there’s no reason to ever get out of debt and find methods to push taxes indefinitely. Grant cardone comes to mind. This can work until it doesn’t, and then the cards fall. In 2008 many had their HELOC loan immediately due because the property value plummeted.

i also see little value in becoming a one house landlord. Either it becomes a lot of work for the owner, or the property mgr takes the profit. If I was in that situation and I wanted to live somewhere else, sell the property and buy the next house for cash. Or a small mortgage.

Some thoughts on why I would keep it. 

1. I’m building a rental portfolio and acquired my first property about 5 months ago. Hopefully this would be around my 5th rental by the time I move. Goal is to have them all cash flowing well by the time I retire in 20 years. This house would easily cash flow today and should be great in 20 years.

2. I’m at a place in the amortization schedule that each payment is making a good dent in the principle. Seems silly to pay 20 years of mostly interest to sell it when you (or a renter) is taking out bigger chunks each month.

3. It’s in a nice area that will be easy to get good renters that stay for years and don’t trash the place. There’s always risk with tenants but this is about as good as you can do. There’s house is well built, 4 side masonry, and I know how all the major expense items have been handled well. Shouldn’t be too many surprises.

4. I’ve got a low interest rate locked in. 

5. No guarantees for the future but it’s been appreciating nicely. Even a 4% average increase moving forward adds 25k of on paper value each year. At some point in my life, the house should be worth over a million dollars and paid off. Nice little insurance policy in old age. 

  • Hook 'Em 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.



×
×
  • Create New...