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Link Posted: 2/22/2021 4:03:10 PM EST
I've been doing it for over 30 years but I'm investing in real estate.
I use my home equity line of credit to buy rentals for cash.
I fix them and increase the cash flow. Then I get private financing and repay myself
It's worked well for me
Link Posted: 2/22/2021 4:04:38 PM EST
[Last Edit: 2/22/2021 4:05:14 PM EST by Consigli]
With a paid off house you will always have a place to live in and can sleep well at night.

Biden's priority's clearly do not help America or Americans.  

The bad news is that the Biden administration may cause cause markets to crash and the next great depression may force 95% of Americans into poverty.

The good news is that there will be no racists in a soup line.
Link Posted: 2/22/2021 4:12:05 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By crownvic96:
I wouldn't gamble with my house.
View Quote


I have not considered this and my house is paid for.
Link Posted: 2/22/2021 4:13:10 PM EST
I would do it for real estate investments.

Not sure if I'd have the guts for mutual funds, though the math is there.
Link Posted: 2/22/2021 4:20:20 PM EST
Right now,  yes.  I'm already contemplating refinancing one of my properties so I can pull more cash out of it to invest in something else.
Link Posted: 2/22/2021 4:47:30 PM EST
Not only NO, but HELL NO!
Link Posted: 2/22/2021 4:54:32 PM EST
I would not gamble the roof over wife and daughters heads. Having no mortgage payment is a nice peace of mind. Perhaps instead take the money that would normally go to a mortgage payment and divert it into investments. Best of both worlds.
Link Posted: 2/22/2021 4:58:07 PM EST
What is the "gamble" of investing this money?

Even if your investment goes to zero... which is almost CERTAINLY not going to happen, it could go down though... you will just have a mortgage payment that you'll be able to afford. You aren't going to get a refinance without having means to pay it back, regardless of what the refinance is used for.
Link Posted: 2/22/2021 5:01:36 PM EST
[Last Edit: 2/22/2021 5:12:07 PM EST by MouseBoy]
Less than 55 yes, over 55 no....

Sitting on a house is like sitting on a pile of cash.  One lawsuit and it can get attached and never sold without paying off creditor(s).
Link Posted: 2/22/2021 5:19:54 PM EST
Link Posted: 2/22/2021 5:25:11 PM EST
Yes given the right circumstances.

The first item to consider is the length of repayment and the interest rate.  You want to be borrowing sub 4% and the longer the loan, the better.

The next item to consider is Shiller P/E.  A lower Shiller P/E indicates much more room for future growth and reduced likelihood of major market drops in the short term.  So if Shiller P/E goes to 15, you should absolutely be cashing out and market investing ASAP.  At 20 to 25, it's probably not a bad idea for a 30 year note.  At 30, I'll skip out on a cash out refi and just keep plodding along paying the minimum on my home loan and investing the extra.

When making this decision, all costs need to be considered and loan terms need to be read and understood carefully.  I certainly wouldn't be doing it with some form of ARM.
Link Posted: 2/22/2021 5:35:25 PM EST
Nope, made that mistake once before. We had bought a bunch of Farmland as an investment in before 2009 and had a big mortgage on the primary residence to pay for it. Unfortunately our 1.2 million dollar house with a $750,000 mortgage became a $450,000 house in 2009.
Link Posted: 2/22/2021 5:45:13 PM EST
[Last Edit: 2/22/2021 6:03:16 PM EST by David4327]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DDiggler:
What is the "gamble" of investing this money?

Even if your investment goes to zero... which is almost CERTAINLY not going to happen, it could go down though... you will just have a mortgage payment that you'll be able to afford. You aren't going to get a refinance without having means to pay it back, regardless of what the refinance is used for.
View Quote


Some people are too scared to ever take chances or any risk in life, that's why they are called snowflakes.
Link Posted: 2/22/2021 5:47:03 PM EST
12 months ago, it would have been genius!
Link Posted: 2/22/2021 5:50:31 PM EST
Only for emergencies.

For investment, it would have to be something local with extremely good potential, like a carwash, self storage, laundromat.

I'd also have to talk the wife into it.
Link Posted: 2/22/2021 5:51:12 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Leisure_Shoot:
12 months ago, it would have been genius!
View Quote


It didn't hit my preplanned Shiller P/E 15 trigger or I would have done it.
Link Posted: 2/22/2021 5:52:25 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By M4DUDE:
Theoretically might be a good move - but I don't think I'd actually do it.


View Quote

This.
Link Posted: 2/22/2021 5:52:47 PM EST
HELL NO!
Link Posted: 2/22/2021 5:55:32 PM EST
The wife and I did.

About two years ago. We invested around 100k in two local businesses and the majority of that was through a HELOC, the rest was cash. We are approaching the time when we expect to begin to be paid back. If I could do it over again, I wouldn't do it, just because I like the peace of mind of having a paid-off house.

YMMV, a lot. This isn't advice, just an anecdote.


Link Posted: 2/22/2021 6:03:33 PM EST
Yes because having all the eggs in one basket doesn’t help.  It’s not making you additional money and if you lose your job or retire, harder to pull money out for other projects.
Link Posted: 2/22/2021 6:06:48 PM EST
I would probably only do it if I had a time machine, basically 100% absolute sure thing investment. Like being able to borrow $300K, go back in time, buy GME at $3 and sell it at $360 and then pay off the mortgage and go on investing with the rest.


But as stated above, don't gamble with your house. I usually look at the equity as security, or something to borrow against to make improvements.  I did a refi on my last house for 75% of the value and used the extra cash as a 20% down payment on my next house, then rented out my old house. Got a stupid huge mortgage interest deduction on my taxes for a few years, and had a bunch of nice deductions for business expenses.
Link Posted: 2/22/2021 6:14:22 PM EST
No way. If you can't afford something, wait until you can afford it. The world has become one of needing an instant gratification. Learn to do with out, and learn to save your money. Never deplete your financial resources, especially with the way things are right now.

Link Posted: 2/22/2021 6:15:42 PM EST
Absolutely- get a note for 4%, invest in the stock market and make 8%, for a net profit of 4%.
Link Posted: 2/22/2021 6:27:02 PM EST
One day i will be gone. I have a wife and 4 kids still under my roof which is paid for.

That day may come tomorrow. Knowing that they wont have to worry about a house payment or rent when im gone is worth having the house paid in full. Even at a young age. YMMV.
Link Posted: 2/22/2021 6:32:20 PM EST
Nope.

Having a paid off house while your still working provides freedom. That is more important to me than maximizing dollars in the bank. I’m not there yet. But within 2 years of getting our 30 year mortgage we refi’d for a 15 year so we got to at least skip ahead a bit.

Fortunately the way it works out is getting to that point also requires things that provide freedom as well.

Why not invest the mortgage payment amount per month instead of turning your home into collateral for an investment?
Link Posted: 2/22/2021 6:34:47 PM EST
I would, but only if Tom Selleck recommended the reverse mortgage company.

Quigley wouldn't steer a fella wrong.
Link Posted: 2/22/2021 6:35:47 PM EST
Absolutely fucking not.
Link Posted: 2/22/2021 6:39:22 PM EST
lol, no.
Link Posted: 2/22/2021 6:42:35 PM EST
I'm trying to slow pay my mortgage waiting on the Job Biden mortgage relief.
Link Posted: 2/22/2021 6:43:17 PM EST
If the goal is to get out from under house debt, getting in more house debt is dumb.

On the other hand, if you can make more on the investment than the interest/payments, it’s a plus.
Link Posted: 2/22/2021 6:45:03 PM EST
If the math worked out...
Link Posted: 2/22/2021 6:57:06 PM EST
Nope.
Link Posted: 2/22/2021 7:20:25 PM EST
I pulled money out last summer when the rates were dropping. Took that money and invested in multi-family real estate. Currently pulling enough in distributions to pay for my mortgage plus a decent chunk more. Ultimate goal is to average 20% per year at year 5 of the investments. At that point I will re-evaluate to see if I want to pay off my mortgage or roll the money into other multi-family investments to continue building my RE portfolio.
Link Posted: 2/22/2021 7:24:47 PM EST
Imagine how awesome a 100 year mortgage would be.

Give me that at 4% and I’m yours. Take me.
Link Posted: 2/22/2021 7:27:05 PM EST
Nnnnnnnnnnn-no
Link Posted: 2/22/2021 7:39:50 PM EST
I took out a mad size home equity loan to buy bitcoin.
Link Posted: 2/22/2021 7:54:49 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By samo38:
I'm not.

I could see using a heloc to cover any emergencies, but I like sitting in my paid off house.
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Yup. Feelsgoodman.jpg
Link Posted: 2/22/2021 7:57:17 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Vegitan:
Too many variables to answer definitively, age, health, financial situation etc.

I would consider the option if I needed to buy another property or start/expand a business.
View Quote


this is the right answer.

me? absolutely. should you? maybe. hating debt is just stupid. that doesn't mean there arent reasonable situations where debt is awesome (making tons of money) or really bad costing tons of money (credit cards)
Link Posted: 2/22/2021 8:00:30 PM EST
[Last Edit: 2/22/2021 8:02:21 PM EST by wingsnthings]
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By molson3530:
Possibly to make improvements to my house and only if they add as much or more more value as the loan.
View Quote
I plan on selling as-is. Then buyers can choose to decorate as they want.

And I've seen so much remodel chicken shit, I wouldn't trust anyone I couldn't watch.
Link Posted: 2/22/2021 8:11:49 PM EST
Me and my are in our early 40s. Both of us have gotten to experience layoffs. We have a rental, good 401k position given our ages, and we are half way to having our house paid off. Our goal is to pay our house off first... we should have the house paid off in about 5 years. Then we will either purchase some more rentals or timber property.
Link Posted: 2/22/2021 8:11:54 PM EST
[Last Edit: 2/22/2021 8:12:38 PM EST by 1999cutiger]
No way...too much unnecessary risk.
Link Posted: 2/22/2021 8:17:51 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By DCLXVI:
One day i will be gone. I have a wife and 4 kids still under my roof which is paid for.

That day may come tomorrow. Knowing that they wont have to worry about a house payment or rent when im gone is worth having the house paid in full. Even at a young age. YMMV.
View Quote


Isn't that what life insurance is for?
Link Posted: 2/22/2021 8:22:02 PM EST
[Last Edit: 2/22/2021 8:23:24 PM EST by spidey07]
Fuck yes!!!!!  At these rates it’s free money. I pulled 250k out, refi plus heloc.

Free. Fucking. Money.  This is the time of opportunity.
Link Posted: 2/22/2021 8:22:56 PM EST
No, I would not pull cash out of paid off house to invest.

I paid off the house and farm almost 10 years ago.  I save, invest and spend the amount that used to be the mortgage.  What a helluva feeling not to owe anyone anything.  Freedom!
Link Posted: 2/22/2021 8:40:29 PM EST
What's the avg house cost?  Let's say $200k.  What's the average person who owns a $200k house outright have in savings/investments?  Let's say $100k.  This person has $300k in assets and 66% are invested in real estate. Is that a wise allocation of investments?
Link Posted: 2/22/2021 8:43:06 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Bizzarolibe:

...If I were 55+ sitting in a paid off house, I don’t think I’d borrow against it.
View Quote



dammit
Link Posted: 2/22/2021 8:43:20 PM EST
I'm 60, house is paid, I have no debts (just bought a new truck and paid cash). With the uncertainty of the stock market, our country's economy, and the democrats plans to destroy the US, absolutely no way would I  borrow money and invest it. I'm sure there are people that are better investors and can cash out their house and make money investing it, but I have no desire to try. I'm comfortable, not rich by most people's definition, but I am content and have a blessed life.
Link Posted: 2/22/2021 8:52:48 PM EST
Discussion ForumsJump to Quoted PostQuote History
Originally Posted By Vegitan:


Isn't that what life insurance is for?
View Quote


For some yes, for me no. My policy and savings will allow my wife and children to live comfortably until they can learn to live without me. The house being paid off is one more additional safety net and one less expense for them.

Link Posted: 2/22/2021 9:05:35 PM EST
I would normally not. My home is sacred to me. If I lose everything I'm fine as long as I have this roof over my head. But a few months ago I pulled $600k on it to buy properties that would not wait otherwise. The properties are up 50% in that short time period, so the risk was worth it.

My point is that there are exceptions, but be very careful. Real estate is one thing. I would never play the market with my home's equity.
Link Posted: 2/22/2021 9:12:46 PM EST
Hard NO!
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