Author Topic: Velocity/HELOC Payoff Strategy  (Read 3334 times)

Offline Alexsei

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Velocity/HELOC Payoff Strategy
« on: November 04, 2018, 08:35:14 PM »
Here is a starter on this, would love to start a discussion https://m.youtube.com/watch?v=TWh5vBa-jhM
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Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #1 on: November 04, 2018, 08:55:00 PM »
I will make it simple after wasting 12 minutes watching it.
SCAM!!!
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Offline Alexsei

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Re: Velocity/HELOC Payoff Strategy
« Reply #2 on: November 04, 2018, 08:57:29 PM »
I will make it simple after wasting 12 minutes watching it.
SCAM!!!
If would've watched it till the end and said that I hear it but at 12 minutes ? If I understand it right it may not be as they make it sound but I don't see the SCAM part yet
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Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #3 on: November 04, 2018, 09:04:26 PM »
If would've watched it till the end and said that I hear it but at 12 minutes ? If I understand it right it may not be as they make it sound but I don't see the SCAM part yet
You end up paying more in interest. That is a SCAM!!!
I just found a new supply of forks!

Offline Alexsei

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Re: Velocity/HELOC Payoff Strategy
« Reply #4 on: November 04, 2018, 09:07:44 PM »
You end up paying more in interest. That is a SCAM!!!
can you explain or link?
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Offline EJB

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Re: Velocity/HELOC Payoff Strategy
« Reply #5 on: November 04, 2018, 09:14:25 PM »
He doesnt even know how to spell principal, so i dont trust the guy after 2 minutes.

Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #6 on: November 04, 2018, 09:14:55 PM »
can you explain or link?
You have a loan at 5% and are paying it with a loan at 7%. It is simple math.
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Offline EJB

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Re: Velocity/HELOC Payoff Strategy
« Reply #7 on: November 04, 2018, 09:26:27 PM »
You have a loan at 5% and are paying it with a loan at 7%. It is simple math.

I really don't understand how the strategy is better than just prepaying....

But he makes it seem like paying 80-100% interest over 30 years is a bad thing. It's actually a great thing for most ppl.

Offline Alexsei

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Jews ≠ Zionists
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Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #9 on: November 04, 2018, 09:30:30 PM »
I really don't understand how the strategy is better than just prepaying....

But he makes it seem like paying 80-100% interest over 30 years is a bad thing. It's actually a great thing for most ppl.
He what's you to think that the interest you save on 5k (need to watch 12 minutes) makes the difference. It is just funny math.
I just found a new supply of forks!

Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #10 on: November 04, 2018, 09:37:53 PM »
found some good comments here https://www.biggerpockets.com/forums/519/topics/453785-has-anyone-ever-used-the-velocity-banking-strategy
You want to save real interest? Get 0% BT credit cards and keep rotating them.
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Offline 12HRS

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Re: Velocity/HELOC Payoff Strategy
« Reply #11 on: November 04, 2018, 09:46:27 PM »
You want to save real interest? Get 0% BT credit cards and keep rotating them.

I love the extra cash i get to play around with because of this. 60k from amex right now is wonderful. Not BT though

Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #12 on: November 04, 2018, 09:52:03 PM »
I love the extra cash i get to play around with because of this. 60k from amex right now is wonderful. Not BT though
You can get 100k without blinking an eye with a few CC balances. Does that mean you don't need 100k mortgage? I think I will sell this method.  :)
I just found a new supply of forks!

Offline churnbabychurn

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Re: Velocity/HELOC Payoff Strategy
« Reply #13 on: November 04, 2018, 09:54:01 PM »
I love the extra cash i get to play around with because of this. 60k from amex right now is wonderful. Not BT though
Play around?

Offline 12HRS

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Re: Velocity/HELOC Payoff Strategy
« Reply #14 on: November 04, 2018, 10:15:56 PM »
You can get 100k without blinking an eye with a few CC balances. Does that mean you don't need 100k mortgage? I think I will sell this method.  :)

had 250k in the bank at one point with CC balances. that thought crossed my mind a couple times but would require some serious effort to keep it up every month.

Play around?

what would you do with it?

Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #15 on: November 04, 2018, 10:20:22 PM »
had 250k in the bank at one point with CC balances. that thought crossed my mind a couple times but would require some serious effort to keep it up every month.
That's how I started in this game (BT's) but interest rates were 5%+. Might have to start doing it again with rates going up.  :)
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Offline jes

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Re: Velocity/HELOC Payoff Strategy
« Reply #16 on: November 04, 2018, 11:07:22 PM »
I actually did the math once and it's basically the same as just prepaying the principal that amount.

Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #17 on: November 04, 2018, 11:28:45 PM »
Here is basic but good write up. The bottom line is: "Velocity banking is not the fastest strategy for paying off a mortgage. Making extra payments equal to your free cash flow on your mortgage is actually the best strategy when it comes to quick repayment and less interest paid. Just when making extra repayments, you’re not able to see that equity until you’ve sold the real estate or applied for a Line of Credit."

https://bankorganizer.com/banking/velocity-banking/
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Offline Alexsei

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Re: Velocity/HELOC Payoff Strategy
« Reply #18 on: November 05, 2018, 07:27:59 AM »
got it, but the argument they make is that just the savings resulting from the structure of the HELOC (Average daily balance) is significant, furthermore paying of a larger amount on the principal means you actually need to have the cash on hand
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Offline ChaimMoskowitz

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Re: Velocity/HELOC Payoff Strategy
« Reply #19 on: November 05, 2018, 07:36:58 AM »
Their "argument" as you call it is based on false math.
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