You are actually borrowing money for more than the return you are getting on it just to have it in the bank and that is asinine IMHO.
It is not just to have it in the bank. It is so that it is in the bank to enable buying one or several properties at a huge discount instead or sitting on the sidelines while other people buy them up.
It is a strategy that can be played well. If he has strengths to back up this move, like he is good at speculating or rehabing properties and managing rentals or flipping ect. it could work out well for him. If the opportunity does not come up,or if his heloc rate goes up before he can make a good move, he gives the money back. Big deal.
Helocs are not 4% when you can’t qualify for one and I think that is what Bobs was saying. His Heloc was at risk of getting pulled which probably means he wouldn’t get another one.
