A Home Equity Line of Credit (HELOC) is one of the most convenient, flexible, and low-cost ways to borrow money.

It can help you access funds to improve your investments or help you get out of debt faster. You may want to cover a mortgage, purchase another property, do a home renovation, or pay for your child's education.

You can use a HELOC to borrow against your home equity, which has a lower interest rate than traditional lines of credit or credit cards. Your HELOC's minimum monthly payment is typically just the interest accrued on any balance you carry. You can choose to pay the balance itself, or any part of it, at any time, and the interest stops accruing immediately.

You can also access the equity in your home with a refinance. The entire new mortgage is advanced on day one, and the interest on the whole thing starts rolling. With a HELOC, you can access funds anytime and pay them back whenever you want. In a refinance, you'll receive the cash right away, but you'll also start paying interest on your mortgage right away. Refinance rates are usually lower than HELOC rates.

Balancing the pros and cons of HELOC versus a refinance can save you a lot of money. We'll work together to determine the best rate and product for you by comparing your options with several lenders (even your bank)—all at no cost and without obligation to you.

How much are you looking to borrow?

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To start, you need to understand the basic math of investing. You either buy low and sell high, or you buy well and keep for a while. Ask yourself, which one do you want to do, and how will your numbers look? Together, we can work out some scenarios and prepare you for your search.

Every investment comes with its own set of risks. We can consider mitigation strategies to help you manage some risks, but not all are inherent in a given investment. Real estate is no different. The plan you choose will have its own set of risks. How you manage or minimize them will depend on your unique approach.

Buying a property out-of-the-box means you’re not inheriting old problems, and the place will come with a warranty. As they say, the new car smell is never free.

An upfront conversation about your numbers can put some of these elements into perspective and help you plan your real estate portfolio around your goals, abilities, and lifestyle.

Cash flow is what you make every month minus what you spend. What you spend every month should include a buffer for any unplanned expenses (which you should be saving up for anyways). Positive means you’re in the plus and visa-versa.

The bank views cash flow-positive property as a more robust investment and is more likely to lend preferentially against it.

How do you estimate and budget for cash flow? That’s a more extensive conversation that we can have.

The answer is it depends. First, you should ask at least three people: your accountant, mortgage broker, and lawyer. There are considerable implications of doing so, but I’ll stay in my lane and speak only to the borrowing ones.

When you finance a property held in a holding company, there are rules you have to follow. In addition, you will:

  1. Limit your choice of lender and product options.
  2. Incur costs and be bound by some additional conditions of financing.
  3. Forfeit some privileges you may be otherwise entitled to when buying a property as an individual. And notwithstanding all of the above, it still makes sense to go the hold-co route for some specific scenarios.

Call professionals, take good notes, and run some solid numbers to make sure this makes sense for you - before you make a move. Ask to be referred to tried and true professionals who can help you improve the quality of the answers you get.

Investment concepts, where the outcome hinges on elbow grease or downright speculation, are often harder to sell to a lender. These projects will hold the operator (you) to a higher standard of financial ability to service this debt should your project hit choppy waters.

In contrast, opportunities, where properties have a strong cash flow and a solid long-term value projection, will be a lot easier. Financing costs will be lower, and the emphasis will be placed on the property itself rather than its investors.

A home equity line of credit (HELOC) is secured credit. Your home acts as a guarantee that you will repay the money you borrowed.

Up to a maximum credit limit, you can borrow money, repay it at your discretion, and borrow again. It typically comes with higher rates than their regular mortgage counterparts. You can best use them for consolidating short-term and/or recurring costs.

There are other factors to consider, and every situation is different. Talk to a professional to help weigh your options.