Looking for creative ways to fund a home remodel. $1M in ira and after tax investment (stocks, crypto, etc). TC $450k. House worth $2M and a i owe a lil more than $1M. Constraints; I would rather not selling crypto or stocks to fund remodel. Also not sure I want to get a HELOC. Has anyone done a securities based line of credit? Im seeing etrade and td ameritrade offer loans as low as 2% against brokerage accounts. Open to any and all ideas. Thanks Blind! #personalfinance #investments
You can maybe get a builder loan
Is that through your home lender?
The actual name is a “home rebuild loan” you can get it from your lender but can also shop around - it’s mostly predicated on your credit score. Prob your best bet
Margin loan on your stocks might make sense, but there is some market risk. Money mustache wrote a how-to/why column recently: https://www.mrmoneymustache.com/2021/01/29/margin-loan-ibkr-review/
If you cant pay cash for a remodel on your personal home then you can't afford it. It's not a cash flow generative transaction
Definitely sage advise. However in my situation, I have stocks and crypto that I don't want to liquidate at this time. I'm betting that it will 🚀 more than interest payments from a equity line of credit. Remodel would make the house more livable and pay for itself in increase in the resale value.
Resell value is what contractors try to sell you on. In my experience, your design tastes are generally not the same as your buyers. So don't expect to recoup remodel costs in sale price. Plus, you have to pay capital gains on it. Really only expect it to be a personal enjoyment expense and not an investment.
It depends on what you’re changing. If you’re looking for the best return for your dollar in a resale, consult a real estate agent but realize that the market can change if you’re not selling for a while and what’s in now may not be in a couple of years.
I’ve used a HELOC. Low rates and the interest is tax deductible.
Heloc would prob be the most straight forward to secure and pay off. In my case the interest would not be tax deductible bc I'm already carrying the $750k mortgage limit max deduction for married taxpayer.
Cash out refinance, pleged asset line, or HELOC are options for you.
Thanks! Have u guys tried a heloc against brokerage accounts?
HELOC is home equity line of credit, you take it against you home equity. If you want a loan on stocks, look at margin or pledged asset line. Interactive brokers and Charles Schwab have good programs for this and you can negotiate spread.