How to Use Home Equity to Invest in Real Estate NOW

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Got home equity? Great, because today we’re showing you how to use home equity to invest in real estate, even if you’re low on cash. But maybe you’re still saving up to buy your first property. Well, we’ve got you covered; we’re also sharing the TOP ways to use your retirement accounts-your Roth IRA or 401(k)-to invest faster than ever before and even lock down your first property in 2024!
Joining the show is Kyle Mast, fellow real estate investor and CFP, to talk about all the ways you can invest in real estate that you didn’t even know about. And if you’re like many Americans, you’ve got home equity just sitting there, waiting to be used, so today, we’re walking through how to unlock it so you can build wealth faster, retire earlier, or renovate that rental you just bought!
Kyle goes over the multiple ways to finance these investments using a home equity line of credit (HELOC) or retirement accounts like Roth IRAs and 401(k)s, the special program new homebuyers can use to get their first house faster, and why you DON’T want to cash-out refinance your property just yet. Ready to start? Let’s get into it!
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Show notes at: link.chtbl.com/BPRE
00:00 Intro
02:21 Home Equity and Cash-Out Refinances Explained
05:06 Americans Have $30T in Equity!
06:13 HELOCs Explained
10:09 How to Get a HELOC
15:28 1. Upgrade Your Rentals
20:44 2. Become a Lender
22:22 Investing With a 401(k)
30:05 Investing With an IRA
36:20 Take Advantage of This NOW

[@davidlangford6056]

The tax savings about converting an IRA to a Roth when you transition from a job to an investor is an invaluable tip!

[@dustydawg473]

I bought for 37k put 60k in. House is 320k now. I've done this all with savings. Thank u for the info struggling for 6 months on what to do next ! 67k cash and 3 rental doors. 2 properties bought and paid in full. Rents are 1500 on average houses at auction sell about 110k at auction for doubles. I'm going to brrr the next deal after hearing this. Save my cash for unforseen opportunities.

[@lailaatallah1857]

Fantastic info, guys!! I learned a lot. I hope youll have Kyle back frequently.

[@desmondthornton]

This conversation is what i have been thinking about for awhile. Thank you keep it up

[@thomastakacs1790]

This is one of my favorite episodes you guys have done. Very informative & a lot of creative tools were covered. Great work David, Rob, and Kyle.

[@t.sierra]

Thank you for this! Everything I needed to hear to purchase our first investment property.

[@sandirep1288]

🤯🤯 🤩🤩 going to listen to this podcast the second time and take notes. Fantastic information to learn how to use more tools that are in your toolbox.

[@reneeREMichigan]

Love the idea as you're transitioning from W2 to Investor, to transfer from traditional money to Roth money!!

[@thomasschlund]

Hit 400k today . thanks for the knowledge and nuggets you had thrown my way over last months.started with 8k in February

[@Zachs-]

I'm surprised that this name is being mentioned here, I stumbled upon one of he's clients testimony on CNBC news last week

[@BollywoodHitsHub]

Pnc has the best heloc at 30 year fix or adjustable with 100 rate lock features with unlimited lock features

[@kennywhateva6279]

I have a 2.5% brought my home July 2020 .it was pure luck 🍀🏡 Heloc all-day 👌🏾

[@felipecueva1685]

By far best episode!!! Thanks !

[@HarryNeetuSingh23]

Can we get HELOC on investment property ? Please suggest for Nevada State area

[@allenluke4224]

I was speaking with a local bank about accessing equity. I offered that if I build a duplex on my own (General contractor) and don’t pay myself (wife has good career), that duplex would be worth much more than what I spent to build. I think that’s equity. The banker suggested that equity isn’t “real” equity because the market can change and the estimated selling cost could go down substantially as the market changes. Essentially, equity based on market value isn’t as solid as money equity in the property. What I was hoping to do is use the equity from the duplex I build alone to finance the next duplex (heloc). Is this a bank’s preference or is this an issue I will run into with most insititutions?

[@zacharyzero]

My company does a 401a and 403b. Can you talk about the differences in terms of using them to invest as to a 401k and traditional Roth ?

[@achag9273]

Great program. Thanks

[@michaeltheboatinglife9359]

This is very dangerous in today’s market. I’ve been investing for 30 years and I’ve never touched anything to do with my primary residence (the roof over your head) plus interest rates are very high.

[@TJ-th9hw]

Great show as always!

[@Odelle8]

A few pros not mentioned about helocs. Since they are interest only payments they have less of an impact on your DTIs than a traditional mortgage does. Definitely something to consider for high leveraged investors. Another thing is that helocs are not amortized like mortgages which makes it much better to pay them down than mortgages as they will have a direct impact on your monthly debt than paying down your mortgage which also makes it more DTI friendly. Lastly most HELOCs are variable BUT usually the plus/minus margins are fixed! So lock in the prime minus rates while they are available and reap the benefits when the variable prime lowers! Can find some prime minus 2 rates in today’s market! As high leveraged investors it’s wise to have a heloc to paydown so that you can always have a strong impact on your debt paydown.

[@Odelle8]

FYI standard heloc rates are prime plus 1. Prime currently at 8.5

[@ESCAPETHEMATRIX]

First comment . Love you guys , I’m 3 units in and hopefully many more to come !

[@valkyr_rl7169]

Starting construction on my first duplex soon. Also very excited for this and more to come!

[@Just_E1]

Great interview as always guys. Although I believe a missed opportunity occurred when Kyle brought up the opportunity window to convert your traditional IRA/401k to Roth. The missed opportunity was the "HOW to convert it" Is he talking about a rollover? Since you can't mix pre tax with post tax dollars, I doubt it's a rollover. Or is it simply taking the income from the traditional IRA/401k plan and making yearly max contributions? I would assume the latter due to the statements about the tax implications of the income tax. Just my assumption but would've loved his clarification on this.

[@zeekflash6924]

No one is gonna cash out refi, now with rates at 6-7% & your lock in a 3-4% , heloc is at like 9-12 % hard to get your equity

[@JC-qu7iw]

Welp. There's a couple geniuses in this chat that are in the process of cash out refi's lol. But I'm with you!

[@DR-eh3if]

What are credit unions who offer helocs on 2nd homes

[@carlosvillalta9974]

So My current monthly payment is $870 @ 3.75%. I owe $70k on my mortgage and a balloon payment of $30k. If I refi or do a HELOC I'm told the $30k would have to be paid off first so should I do a HELOC or cash out refi? I want to put an Adu in my back yard.

[@user-ts2mk1fv3l]

I’m about to cash out next week but need options on the best lenders! I’m opening a 10 bed assisted living

[@lucyrodriguez7333]

Can you refinance an equity loan?

[@jordanblackburn1230]

Explain buying a property using cash value life insurance

[@shelleym2432]

This is my current situation. I have big equity available and retirement but can’t seem to find a cash flowing property to make the numbers work without being stuck in a high monthly payment on the HELOC

[@vermonburt2252]

Very informative gents👏🏿👍🏿 coming from a w-2 guy

[@MrTexaz101]

Is paying off bad debt with a HELOC a good idea?

[@danielhenkins]

I was happy to hear somebody mention the credit card hacking something I've been looking into greatly

[@TiK2theToK]

Might as well take it to vegas.

[@firstnamelastname9661]

HELOC interest rate can be FIXED INTEREST. I see banks advertised that before

[@rizkisetia6538]

So when you have the big equity in the property and you pull the money by refinance the property, that’s mean we going to have bigger mortgage and bigger monthly payment. What do you think about that?

[@user-ts2mk1fv3l]

Depends on what you are using the money for. If you are putting in into another property that will produce more money today and years later- that’s a win win. But if you pulling it out to buy shoes and go on vacation then you screwed yourself for nothing.

[@tmorales1226]

Found a credit union with a 5.5% intro rate for 12 months then back to prime!

[@YourGuiltyConscience]

Which one?

[@tmorales1226]

@@YourGuiltyConsciencedade county federal credit union

[@ittakeswill4746]

Anyone reading this use their HELOC to buy a rental at auction or even a tax deed sale?

[@octaviakf]

This is good I have several properties and all of them have a whole lot of equity easily sitting on $1m from the equity alone. I’m going to get them in place to have access to them. If I can do a couple of short term flips that would be great. Ima do it for all of them.

[@AyahuascaDataScientist]

It’s been years and they still have Rob on here? Good help must be truly hard to find…

[@ShadoSpartan44]

im in the process of getting a cash out refiance, we hope to get the money ASAP so we can buy a new house in our neighborhood and flip it into a rental

[@user-hx3pv2xq4w]

Check out the Heloc route better, I would not sell my house, specially since rents are so expensive, and you still need to purchase an expensive house with high interest nowadays… if you rent your home you can pretty much break even with your mortgage depending on the interest you have in your corn current mortgage.

[@lucyrodriguez7333]

I’m doing the exact same thing, I already have the funds of the equity loan. With that money I made repairs on it and I’m about to put out the For Rent sign. See how it goes.

[@keithb3801]

​@@lucyrodriguez7333Correct me if I'm wrong butn when you do the HELOC, you need to find a property that can rent for the cost of the HELOC pmnt + the new mortgage correct? Otherwise you are going backwards and not covering your expenses. We have equity in our rental but not sure where to find a property that will rent for more or equal to the HELOC + payment on the new rental.

[@Honkers716]

These guys are literally telling old people to take the equity in their home, that they have spent the last 20 years building up, that was done on a very great economy that will never happen again. And take out a loan against what they just saved and paid for, at a higher interest rate that those old people have ever seen in their lifetime. For what? 😂 How do you sleep at night making these videos? Pathetic

[@matthewbowers6178]

Probably sleeps with a fan on. Its just a strategy if you have a plan. Old people are not stupid

[@pozzerbob]

Sounds like terrible financial advise?

[@0xfcmatt208]

Their job is not financial advice. Their job is to make videos, say whatever gets them the most views, and profit from it in different ways beyond what youtube pays. So they come up with every possible variation of buying property even if it makes very little sense for most people. So take one little idea that can be explained in 3 minutes but flesh it out with chit chat so youtube can insert ads while pretending if you say the same thing over and over you will be considered credible. Same with "training", "coaches", etc.. It is a whole industry. My wife and I have a HELOC. We never used it. But if we did we have enough in non retirement accounts to pay it off in full immediately if we wanted. It is just a way to access cash instantly. Cash you already have working for you in other ways. They often suggest to take risk with a HELOC most people definitely should not be doing. Too high a rate if you cannot pay it off quickly. Naturally they assume you can get a KILLER real estate deal to make it all worth the risk. You too can be super SAVVY and profit.

[@moexii6308]

Some of the ideas this people are saying feels like they're day dreaming

[@J.Zealuis]

🤔🤔🤔 So how does Bur method work? They always says you get a loan for a property and fix it and now you can refinance it for a higher price? But y'all are saying they can only get it on the difference between how much they owe