HELOCs going up tomorrow

If you are like I was, at one point I was heavily leveraged. HELOCs were one of my favorite vehicles. I used and abused them. After all, it was easy money to get. If your HELOCS are like mine, after the fed raised .25 today, your rate will be going up tomorrow . Every 100k will cost you about $20 per month. They also said they were looking at raising 3 times next year, so by this time next year you could be looking at an extra 80 per month out of pocket. Don’t forget to raise your rents ASAP to cover this. Now, hopefully savings rates will go up as well. --75.141.xxx.xxx

HELOCs going up tomorrow (by Roy [AL]) Posted on: Dec 14, 2017 3:41 AM
Message:

Homer, Homer, Homer,...you have ruined my day with this news. And I was planning on using a Heloc to buy my next crib in January 2018. You really know how to pop someone's bubble.

Is the ultra low interest rate HELOC honeymoon over? I was paying 3.5% but I guess that is a thing of the past now?

I can't raise my rents, I am already above market. Any other suggestions? --68.63.xxx.xxx

HELOCs going up tomorrow (by S i d [MO]) Posted on: Dec 14, 2017 5:36 AM
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Awe gee, and I don't have a HELOC. ;-)

Roy, there are lots of ways to generate more income often by using assets already at your disposal. For example, I've been working on a strategy to add extra storage to my existing unit via pre-built and installed sheds. An 8x10 in my town will rent for $35/month easily, based on my research of several local storage facilities. They actually go for more, and you have to travel to get there which is an extra hassle, so I think I'll be able to undercut the market significantly while still making a great profit.

At $35/month for a shed costing $1250 "all in" (structure, delivery, installation, leveling), I'm at a 2.8% Rent to Purchase Price Ratio (RPPR). Normally, I aim for 2% on rentals, so this fits. $1250 sheds are cheap enough to buy several each month without going into debt. I already have the land at my houses and my city allows up to 4 ancillary structures (i.e. sheds) per unit, so I do not have to buy expensive commercial land to get this process started. My intent is to give the tenant free or reduced storage shed space in exchange for allowing us to have several other units for other folks accessible. It will be part of the main dwelling lease. The trick now is getting constant access into some of my yards....working out the details on that.

Am I worried about tenants filling the place up with junk? Not really. The 2-minute in home inspection will help me see who is a slob and who isn't. Plus I'll have a $100 deposit for the shed. My handyman can trash out an 8x10 shed in an hour for $80, which includes the dump fee.

If this goes well, I'm also considering adding electrical power for one shed per property to turn it into a shop or man-cave. Of course, rent will be higher.

If this doesn't work out, no biggie. It's only a $1250 shed... --173.19.xx.xxx

HELOCs going up tomorrow (by Jeff [OH]) Posted on: Dec 14, 2017 5:58 AM
Message:

Sid, that is very interesting. I have in my area an older gentleman who has been building 8 x 8 sheds out of ‘cull’ lumber for $400. I then pay a $100 to a towing company that owns a flatbed to come deliver them to my properties. So I’m all in for $500.

But, I own mostly SFH and I have been using it as more of a tenant retention program and not for additional income. I have bought probably a dozen or more and I give the tenants a 1 gallon can of oil base stain and tell them it’s their responsibility to paint it. --142.54.xx.xxx

HELOCs going up tomorrow (by Homer [TX]) Posted on: Dec 14, 2017 6:13 AM
Message:

Alright Roy. 3.5%? So, how in the world are you getting a rate that low? What’s the whole story? Is this one of those brother in law deals? Do you have something on the bank president which forces them to give you such a great rate? I think the lowest HELOC I ever had might of been 4.5. You are killing it. RENT ON! --75.141.xxx.xxx

HELOCs going up tomorrow (by Kyle [IN]) Posted on: Dec 14, 2017 8:22 AM
Message:

Roy- 3.5% is a good rate. If it goes up to 3.75%, it's still a good rate. For your $5k handyman special house, the increase will only cost you about $1/month.

Sid- I like the storage idea too, but I worry it will effect the quality of tenant for my house. Who wants to pay market rent for a house with self-storage in their back yard and strangers visiting frequently? I think it only works on properties with an alley or some other way to give separate public access for the storage. --73.102.xxx.xx

HELOCs going up tomorrow (by Ken [NY]) Posted on: Dec 14, 2017 8:51 AM
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I was thinking what Kyle said about the sheds,also class c tenants are not interested in paying for a shed to use,they are interested in simple survival --72.231.xxx.xxx

HELOCs going up tomorrow (by Roy [AL]) Posted on: Dec 14, 2017 9:00 AM
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Okay Homer,..you got me. I confess,...I am having sex with my female bank manager,...we even did it inside the vault one night.

More seriously, I have an 830 FICO score which could have something to do with it. Plus, I borrow a ton of money and pay it back. What else can I say here? Wells Fargo loves me in more ways than one.

--68.63.xxx.xxx

HELOCs going up tomorrow (by Johnny B. [MA]) Posted on: Dec 14, 2017 9:41 AM
Message:

For $35 a month I wouldn’t want the additional liability of a non-tenant accessing my property to store their junk. If you do the shed storage idea, I’d only rent to tenants. --107.77.xx.xx

HELOCs going up tomorrow (by NC INVESTOR [NC]) Posted on: Dec 14, 2017 10:33 AM
Message:

I'm seeing rates as low as 3.275% for HELOCs in my area.

For me the bigger issue isn't the HELOC rate it's what affect that will have on lifetime cap for MI deductions and if the cap begins with the tax plan passing or retroactive to the beginning of the mortgage. --71.75.xx.xx

HELOCs going up tomorrow (by Abbie [MO]) Posted on: Dec 14, 2017 10:41 AM
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Roy, not funny. --67.199.xxx.xxx

HELOCs going up tomorrow (by Homer [TX]) Posted on: Dec 14, 2017 10:51 AM
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Roy, congratulations on that 830, you have me by 60, and I’ve never missed a payment in my life. You rock! For grins i logged into my Wells Fargo account to the heloc calculator. If I were to get a new loan, it would cost me 5.25. I take your statement seriously with how you got it. Not really though. Now, I know your name is Roy, and I know well the name of your city in Alabama, now I am wondering if your last name is Moore? Can’t imagine being at ground zero of that mess. --75.141.xxx.xxx

HELOCs going up tomorrow (by Chris [CT]) Posted on: Dec 14, 2017 4:18 PM
Message:

I guess my payments are going up $800 a month at some point! Oh well still cheap money.

My construction mortgages will go up right away, the commercial stuff doesn't reset for awhile.

--24.45.xxx.xx

HELOCs going up tomorrow (by Roy [AL]) Posted on: Dec 14, 2017 4:47 PM
Message:

Homer,

There are 2 types of HELOCs,...and I have both of them. One is personal in which my own personal residence is used as collateral,..this is the one at 3.50%. The other type of Heloc is Business oriented and my high FICO score and my 'good name' is used for collateral and the business rate is 5.5%.

Abbie - who ever you are,...I was just joking about shacking up with the bank manager,...where is your sense of humor? Every LL has to have a sense of humor or you will go nuts in this crazy business. I do apologize if I offended you. --68.63.xxx.xxx

HELOCs going up tomorrow (by Roy [AL]) Posted on: Dec 14, 2017 5:03 PM
Message:

Homer,

Yes, I live in Gadsden, AL which is the home town of defeated GOP senate candidate, Roy Moore. No, my last name is not Moore and I have no relationship to this person.

If you want to know my last name, you will have to attend the next Mr. LL convention which I plan on attending. Are you going to be there? I hope so. --68.63.xxx.xxx

HELOCs going up tomorrow (by GKARL [PA]) Posted on: Dec 14, 2017 7:13 PM
Message:

My business heloc is at 5% as well. I could get a big one on my residence, but I'm very wary of that. I'm refinancing two commercial loans now and am getting 4.75% fixed for seven years. No bank around here can match that. I have an 800 fico which helps. --172.56.x.xxx

HELOCs going up tomorrow (by Roy [AL]) Posted on: Dec 15, 2017 1:18 AM
Message:

Gkarl,

If you have a lot equity in your personal residence, then having a small $50K heloc is not a big deal. You WILL pay that debt before any other business debt (your bank is fully aware of this) and that is the reason for the lower interest rate. --68.63.xxx.xxx

HELOCs going up tomorrow (by elliot [RI]) Posted on: Dec 15, 2017 2:45 AM
Message:

I like the flexibility of HELOC.. got a big one on my personal residence and is getting another one on a rental. Same low rate from a local bank..

They are nice to have as reserve instead of 50K/100K sitting in bank, all the cash goes back to paying down higher interest rate mortgages. --71.232.xxx.xxx

HELOCs going up tomorrow (by Ray-N-Pa [PA]) Posted on: Dec 16, 2017 2:14 PM
Message:

I think it is a good strategy to have a HELOC on everything you own if it is paid off. I didn't say you had to use it, just have it so that it makes you appear that you maxed out on the lending in the event if you find yourself in an accident.

They are cheap secondary insurance policy --24.101.xxx.xxx

HELOCs going up tomorrow (by Kyle [IN]) Posted on: Dec 16, 2017 5:37 PM
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Ray - Do you have a bank doing HELOCs on everything? I haven't found any that will do the 11th yet. They want to do an unsecured business line instead. --73.102.xxx.xx

HELOCs going up tomorrow (by Ray-N-Pa [PA]) Posted on: Dec 16, 2017 5:47 PM
Message:

Why would you need a bank to give you a HELOC?

Set up a new LLC and have one LLC lend it too another one.

Another benefit about placing properties in LLC when titling them, you can sell the LLC and go around the due on sale clause --24.101.xxx.xxx

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