I really wish I had learned this a long time ago.
Initially the concept scares a lot of people off - set up a home equity line of credit (HELOC) against the house you live in, and use it to invest.
But when you realize the interest is tax deductible and you get a bigger refund which you use to pay down your mortgage, it makes a lot more sense.
For many, using a HELOC to buy an investment is scary - "What if the investment goes down?"
The reality is that many people use a HELOC to buy things like vehicles, home reno's, vacations and other things that pretty much do go down in value - often to zero. Unfortunately for most people, using a HELOC to invest is dictated by emotion rather than logic.
When I heard about the SM, I started researching it. I bought the book and checked out a number of websites and videos. I've put together a list below in case you are interested that should save you some time.
And then I implemented it.
We took out a HELOC specifically for investing. And then we partnered up with someone to buy an 8-unit multi-family property using the HELOC.
The way we work it, in about 5-7 years we will have the HELOC paid back plus keep our % of the building. And we plan on doing it again.
Update: We took the investment funds out on December 22, 2021 and we repaid the HELOC in full August 01, 2023 and we still have our % of the building!!!!!!!!!!!
If this doesn't make sense to you please feel free to contact me with any questions or better yet schedule a call with me.
Here's some really good resources that explain it a lot better.
If you want to order the book:
Or if you just want to read a sample of the book, I was provided a sample to share from Robinson Smith:
And if you want to implement the Smith Manoeuvre, I can introduce you to a Smith Manoeuvre professional that can help you get set up - just let me know.
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