How First Lien HELOC Can Help You Pay Off Debt Faster and Invest Smarter

Anthony Rushing (00:00)
Now their balance is 410. So all it’s gonna take is, what’s that, 100,000, what is that, 20 months? For them to all of a sudden owe $500,000 on their house. They’re going the opposite direction.

This can be just as dangerous as it can be amazing. And that’s one thing to understand about this is that ⁓ when people succeed, they understand how it works and they have and follow through with behaviors and the routines and the budgetary requirements for them to succeed with this.

Michelle Kesil (02:07)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil Today I’m joined by someone I’m looking forward to chatting with, Anthony Rushing, who is a mortgage broker focusing on First Lien HELOCs to help accelerate home payoffs. So excited to have you here today, Anthony.

Anthony Rushing (02:27)
Awesome. Thank you, Michelle. I’m excited to chat with you today. Thanks so much for having me on.

Michelle Kesil (02:33)
Yeah, absolutely. Okay, let’s dive in. So first off, for those not familiar with you and your workout, can you share what your main focus is?

Anthony Rushing (02:41)
So we, ⁓ my profession, my job is I’m the sales manager of a mortgage branch and we ⁓ help people get into a mortgage called the First Position HELOC. ⁓ It’s ⁓ a mortgage product. It functions differently than an amortized mortgage. ⁓

So that’s our specialty. But aside from that, or guess on top of that, the purpose of what we do is teach people how to use this and teach people how to ⁓ leverage the structure of this particular mortgage product ⁓ to be able to achieve the goals that they want, almost even more like a financial vehicle as compared to just a regular mortgage.

Michelle Kesil (03:25)
Awesome. And which markets do you operate in?

Anthony Rushing (03:28)
⁓ Right now, well, they’re residential mortgages, so ⁓ single family, ⁓ we do ⁓ unit geographic markets, didn’t you? Okay. Well, we do single family residential homes, up to four units, ⁓ but we can serve across the United States. I can’t do Texas, Hawaii, Alaska, or Maryland.

Michelle Kesil (03:39)
Yeah, but that’s okay. You can share both.

Anthony Rushing (03:53)
right now, but every other state in the United States, geographically, those are the regions that we can help with. So, yeah.

Michelle Kesil (04:00)
Awesome. And is this primarily for just home buyers or how does this work as well for investors?

Anthony Rushing (04:09)
Absolutely. So, so First Lien, HELOC, ⁓ the investor community tends to understand this a little bit better than general consumers. ⁓ It’s an open-ended line of credit and it replaces your mortgage. And so it replaces the regular amortized schedule with an open-ended line of credit.

We teach people to use it essentially as their checking account. If you’re a business owner, it functions sort of like a backwards P &L in that we teach them to drive in all the income into this and that pays down the balance.

and then you essentially pull out what you need to pay your bills. And so when there’s cash flow, when there’s significant cash flow, you drive in a good amount of income, which pays the balance down by a good bit, and then you take out what you need, which means whatever you don’t take out is simply still in the HELOC. ⁓ So we’re teaching consumers who aren’t necessarily investor-minded to treat it, to treat their home, to treat their home loan, ⁓ their home finances almost like a business in that, you

money goes in, money comes out. If the same money money that goes in to pay the balance down comes out with your expenses.

down by 10,000, up by 10,000, you don’t pay the house off.

And so a lot of the people that we talk with at the initial pitch is about becoming debt free, it’s about paying off your house. A lot of times people who are investor minded, that isn’t the goal, it’s more about leverage. And ⁓ so as people develop with their financial understanding from I don’t know how to budget now and then I learn how to budget and then I want to pay down debt and now I want to grow.

So we sort of enter into the picture with the, want to pay down debt once you’re already responsible with being able to live below your means and make more than you spend to help people use this in a way if they want to to pay down debt. the reality is if someone has a HELOC on their house and the HELOC’s a $500,000 HELOC, if they owe $400,000 on that HELOC,

The way it works is just like any line of credit where you’ve got your limit and then you’ve got your balance. And what you have available is the difference between the two. So if you had a $500,000 limit HELOC and you had a $400,000 balance, that would mean at that point in time you’d have access to $100,000. As people pay down the balance here with this particular product, it opens up that line of credit because your limit

doesn’t decrease as your balance decreases. So your limit’s always 500,000. So as people pay this down with their cash flow, ⁓ if you were to pay the balance down to 300,000, at that point, you’d still be able to go up to 500. So what that means is now you have access to $200,000 immediately. And so if we compare that to another line of credit that’s secured by your home loan, a second lien HELOC,

A second lien HELOC’s limit won’t increase as you pay the balance of your house down. So if you get a $50,000 second lien HELOC on top of your mortgage, as you pay your mortgage down, you don’t increase the amount of liquidity that you have. Where here, as you pay the balance down, everything that you put toward paying down the balance with the First Lien HELOC stays liquid. So what that means is it allows for you, it allows for people to essentially

kind of get their cake and eat it too at the same time, right? Where they’re able to aggressively pay down debt, have a place to store their cashflow that works for them while they have it, while maintaining access to it. So what that means is at any given point, you can turn around if you have an opportunity that’s available quickly, turn around and invest and pull back from the HELOC. Does that increase your balance back? Yes, but if you’re buying cashflow producing assets, it increases the cashflow, at which point if you’re using the strategy,

You increase cash flow, therefore you increase the pace by which you pay down the HELOC and open up that line of credit to then invest again. So it really, from an investor standpoint, what I see is it serves two main purposes. One is a place for you to store your cash flow in between deals where it works for you. ⁓

It also serves as ⁓ another source of capital along with the other ones that you already have. And sometimes it may be the best option. So we’re looking at rates at anywhere from six, around six and a half to 8%. So if I think about other sources of capital that are available. ⁓

I’m in the lending space, but I’m not in the let’s find a bunch of capital sources. But the sources that I’m aware of in terms of accessibility and rates, I think about hard money. And if I’m good with hard money, I can probably get it in 10 days. And I guess we’re looking around rates of 10%, maybe 11%, depending on who you are.

You’ve got bank money. Bank money usually takes 30 to 35 days. ⁓ Rates are decent, right? Six, 7%, I guess. ⁓ You’ve got things like SoFi where you can get money immediately, but, and we’re talking one, two, $300,000. ⁓ You can get money immediately, but it comes with it. I mean, a five-year amortization and like…

16 to 20 % interest rate. So it’s really expensive. And you’ve got your rich uncle, which we all don’t have one of those. And then this is just another sort, it can’t be another source of capital. If you’re sitting on a good equity position with your home, or if you pay the home down, you can create a good equity position while you pay it down. So from an investor standpoint, it becomes more of a financial vehicle to help you achieve different goals if you want. If you’re on growth mode, you use it as a leverage tool.

If you’re on, let’s pay off some debt, you funnel all your cash flow here and it aggressively pays down debt. And then you can loop in other liabilities as well to help aggressively pay down the debt on those too. So that was a long-winded answer for your question, but that’s kind of what we focus on. the way I feed my family is by…

getting the loans in, but the way that we generate our customers and the way that we source our business is through educating and through advocacy. Because the product itself is out there, ⁓ but the way that people use it to leverage for certain business purposes or other types of goals, that’s the piece that seems to be.

not non-existent, but it’s just not around very much. so ⁓ our goal is to advocate for the use of this ⁓ in case we come across people where they recognize that this product may be a better fit for them than the one that they’re in.

Michelle Kesil (12:22)
Amazing, thank you for sharing. Are there any situations where this wouldn’t necessarily be the best solution for someone?

Anthony Rushing (12:32)
yeah, absolutely. ⁓

This actually isn’t the best solution for most people. It’s a niche product for a niche audience. There are certain qualities that people need to have for this to be a better option. I’ll kind of go back to the basic strategy of using it like your checking account. Go back to the idea of you have a $500,000 limit and you owe $400,000 to the house.

You know, we talked about when you cash flow, when someone cash flows, a lot of money goes in and a little comes out. So, you know, in that scenario, 12,000 goes in to pay the balance down from 400 down to, you know, 388. And then if it’s a household that has a good, great cash flow, there’s, let’s just say they spend 8,000. Well, that brings the balance.

from 388 up to, what would that be, 496, right? That’s $4,000 that’s sitting in there. And what we would say is you’ve paid the house down by $4,000 at the end of that cycle. If that’s consistent month over month, right, $4,000 pay down per month.

divided by, or sorry, $400,000 balance divided by $4,000 per month, that’s a 100-month payoff, which is an 8.3-year payoff. ⁓ But that is a household that cash flows well. They’re disciplined with their finances. They make more than they spend. ⁓ If a household is tight on their budget,

or if they’re struggling making the payments, or there’s a small surplus at the end of the month, but they’re still really tight. ⁓ That’d a scenario where, in that same setup, where you drive in 12,000 of the income, but your lifestyle requires 12,000, so you take out 12,000 to pay for your lifestyle. Well, that pays it down by 12 and up by 12. Down by 12, up by 12. That household would never pay down debt.

this product and this strategy would not align with that particular household situation. Now, I to be clear, there’s nothing wrong with that, inherently wrong. ⁓ I’ve been doing this for seven years, and for the first two years of doing this, I didn’t have a First-Lien HELOC. And people would ask…

you’re saying this is the best thing you’ve ever learned about and it’s helping so many people and why don’t you have one? And I responded, I said, well, what’s the one thing that it takes for this to work? And they said, well.

you have to make more than you spend. And I said, well, yeah, you’re right. And right now in the season of my life, I’ve got three kids that I’m paying for daycare right now. I don’t know if know about daycare costs, it’s like 3,500 bucks that’s just gone. So I reply by saying, I’ll never say that this is the best thing for everyone.

What I will say is I’m really excited that I’ve learned about it. And for a select group of people, a certain group of people who have certain qualities from a budget behavior standpoint, it can work really well. ⁓ If there’s a household that does make more than they spend, they don’t track it or they don’t know how it happens, or they’re not disciplined with that lifestyle and may have more of a consumer-driven mindset.

In that scenario where someone owes $400,000 but their limit’s $500,000, they can overspend by $100,000 without really any big consequence. So they could drive in $10,000 and then spend $15,000. So that would pay it down to $390,000 and then the balance would go up to $405,000.

Well, if they didn’t know that, they don’t realize that they’re overspending and they’re just following their lifestyle, they could do it again, right? 405 down to 395, then they spend 15, they take out 15 to pay for their lifestyle.

Now their balance is 410. So all it’s gonna take is, what’s that, 100,000, what is that, 20 months? For them to all of a sudden owe $500,000 on their house. They’re going the opposite direction.

This can be just as dangerous as it can be amazing. And that’s one thing to understand about this is that ⁓ when people succeed, they understand how it works and they have and follow through with behaviors and the routines and the budgetary requirements for them to succeed with this.

So in terms of what it takes, it really takes a financially disciplined person. ⁓

someone who either wants to pay off their house quickly and save money on overall interest costs because the time that you’re paying interest is so short, or someone that understands this more as a financial vehicle to be able to leverage to be able to grow. You’re buying other income producing assets that then increase cash flow. So, ⁓ I mean, we deal with a gamut of people and it’s interesting because some have, you know, they’re on the verge of retirement and they’re

going to get their pension and they just want to become debt free and live forever in perpetuity. And this can work for those people and that’s great. And if that’s all they want to do, then awesome. And on the completely flip side, we have people whose million and half First Lien HELOCs are always completely maxed out because what they’re doing is they found places where they can

receive an ROI greater than what they’re borrowing at. It’s an arbitration model. And so what it does is it gives them access to three, four, five, seven, know, a hundred thousand, million dollars in capital at six, seven, eight percent, depending on, you know, where you are. So you just receive the difference between what you’re earning and what you’re borrowing at. it’s cost of funds, arbitration kind of model. So it’s really an interesting, you know,

group of people who see value in it, ⁓ but it really all comes down to ⁓ that discipline. And you know, the people that are leveraging like that, if they wanted to pay off their house tomorrow, they could sell some assets and just pay it off. So their goal is not necessarily to become debt free, their goal is to leverage debt to grow. And so this product can serve both…

both people and both goals. It’s just a matter of understanding how the product works and using it in the best way possible for you to achieve your goals.

Michelle Kesil (19:41)
Yeah, amazing. And does this work for, you know, like the investor with multiple properties, like they can use it in for many properties or it’s just one at a time.

Anthony Rushing (19:52)
Yep, can do up to three properties.

If we’re doing three, one of those has to be a primary residence, but I can do two investment properties as well. Again, we’re not in the commercial space. ⁓ We’re in the residential, you know, single family up to four unit, up to the four unit space, but we can do two investment properties slash second homes and then one, ⁓ you know, primary residence. Primary residence can go to 89.9 % loan to value. ⁓ The rental properties can go to 80 % loan to value. So yeah, we can do up to three properties.

Thanks.

Michelle Kesil (20:25)
Thank you so much for sharing.

Anthony Rushing (20:27)
Absolutely.

Michelle Kesil (20:28)
Well, before we begin to wrap up here, if someone wants to reach out, connect and learn more about what you’re up to, where can people find you and connect with you?

Anthony Rushing (20:38)
So if you go to firstlienheloc.com it’s a free educational resource. has a myriad of different… ⁓

sort of educational experiences, also ⁓ case, you know, case uses. If thens it’s got a calculator that you can use to run your numbers to see what it would look like if you were to get a First-Lien HELOC. ⁓ It has a link for you to be able to book a call with one of the loan officers on my team. ⁓ All we do is First-Lien HELOC. So I don’t have thousand products that we need to be experts in, just one. And so ⁓ there are a few other people out there that have products like this, but not

many. ⁓ Our First Lien HELOC works in conjunction with a checking account so and it automatically sweeps the money back and forth so when you want to get money in the checking when you want to get money in the HELOC you just deposit to the checking and it sweeps it into the HELOC automatically and then when you want to access the funds in the HELOC

What you do is you use the checking and it just pulls money from the HELOC to reimburse the checking. So you fully function through a checking account to be able to access the funds in the HELOC and deposit to it as well. So all we do is first in HELOCs and so I would argue that we know this product as well ⁓ as anyone in the United States just because we have…

It’s all that we focus on. so ⁓ firstlienheloc.com is a great place. Are there going to be links that we can add below as well? Okay.

Michelle Kesil (22:14)
Yep.

Anthony Rushing (22:15)
Yeah, so what we’ll do is I’ll send over a couple links to ⁓ one will be the calculator. Another one we’ve got a through firstlienheloc.com. There’s a free educational webinar that will teach and walk through the comprehensive strategy, the things you want to look for with any First Lien, HELOC regardless of of whether it’s with with my team or not. ⁓ And ⁓ it will sort of reinforce some of the understandings here that I talked about.

Michelle Kesil (22:43)
Yep, absolutely. Thank you so much for coming on here and sharing your time and story.

Anthony Rushing (22:48)
Definitely. Thank you. Hope you have a great day.

Michelle Kesil (22:50)
Yes. And for those tuning into the show, if you got value, make sure you have subscribed. We’ve got more conversations with operators like Anthony who are building real businesses and we’ll see you on our next episode.