Investing in real estate...

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glennherwig
Posts: 20
Joined: Wed Oct 24, 2018 7:52 pm

Investing in real estate...

Post by glennherwig » Wed Feb 06, 2019 1:06 pm

I know it all depends on the property but I feel using leverage to buy real estate is the way to go to increase return. I also understand it’s a double edged sword.

My theory...

Would it make sense to buy a property either with a heloc or mortgage even if you could afford the house cash. And then park the money in a 10 yr cd paying 3.35 percent (Schwab offers one through Goldman Sachs) or a bond etf like the iShares TLT that pays a monthly yield. Ive done some number crunching. And it seems like it comes out to pretty much a wash. The heloc is variable @ 5.25% But the perk of the heloc is if rates go down you get a better rate. If rates go up your screwed. Also I like the idea of a heloc because you can make a cash offer. Compared to a mortgage. Also interest rate only payments increase your cash flow. But it does ballon towards the end of the loan.

What are your strategy’s for buying real estate? Fix and rent? Fix and flip? Buy already renovated properties that cash flow?

Constructive critique is welcomed. I like reading this forum a lot thanks for all the input guys.

barnaclebob
Posts: 3995
Joined: Thu Aug 09, 2012 10:54 am

Re: Investing in real estate...

Post by barnaclebob » Wed Feb 06, 2019 1:08 pm

glennherwig wrote:
Wed Feb 06, 2019 1:06 pm
If rates go up your screwed.
What exactly does that mean to you?

Topic Author
glennherwig
Posts: 20
Joined: Wed Oct 24, 2018 7:52 pm

Re: Investing in real estate...

Post by glennherwig » Wed Feb 06, 2019 1:12 pm

You think the con of rates going up completely makes a heloc not a good solution?

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