How Many Properties Should Have A HELOC When Real Estate Investing With Numerous Properties
There's no one-way to do investments because it is all situational and a matter of personal risk preferences. There's no cookie cutter approach. That being said, most real
estate investment portfolios should never have the entire portfolio on HELOCs. The standard number is to have only up to 40% of all
properties on a HELOC in a high-interest rate environment. Leave the rest on
mortgages because those payments aren't going to change.
The good thing about
inflation during trying economic times is that it renders all debt(s) on those properties less and less expensive. $1 in debt this year is worth $0.93 of debt the next year when there is 7% inflation. So those investment properties have a mortgage because a long-term debt during
an inflation period will actually save one more money! The focus on the HELOC(s) is to gain access to the equity by paying it down
quickly using all available cash flows. Every investor has different risk profiles with some wanting as much equity as possible and others wanting the liquid cash flow to put in other investments.
NOTE: Primary
residence HELOCs, up to 4-unit buildings, are typically only approved for a human.
Any LLC, trust, corporation or company may struggle to obtain financing on a
primary residence HELOC, but not secondary and investment property HELOCs.