Hey, everyone, I'm Clayton Morris. Welcome into the big show. Today is our Q&A episode where you're going to be able to leave your voicemail questionsinvest.com click on the microphone icon that's on the

right side of the screen there and then just leave us a 30 second voicemail question all right

victor take it away well clayton my name is victor i am from california i have recently

acquired some equity in my home and i am wondering what safe parameters you think would be regarding

getting a heat lock, what percentages, what to avoid, and if it is worth it going that route

in order to invest into a rental property. I know you have mentioned

that it is a good idea, but I would like to hear your opinion on how much of that equity we

should tap into. All right. Thanks, Victor. Thanks for the great question. So you're sitting on a

bunch of equity in your California home and you're wondering, okay, let's just hypothetically say you've got $200,000 worth of equity in this California home, okay?

And what do you want to use of that $200,000 to buy rental properties out of, you absolutely

do not want to invest in California, right? California is the worst state in the country to invest in

real estate. It is not a landlord-friendly state. In fact, it's arguably the worst,

least friendly landlord state in the country, as you know, being a Californian.

So what can you do with that $200,000? Well, personally, and again, I can't give you financial

advice and tell you to go and do this, whatever, you know, you do you, I will do me. But if I had

$200,000 in equity in my California home, I would get a home equity line of credit versus a cash out

refinance. Okay. Now, you've probably watched my videos where I've

explained the differences between a HELOC and a cash out refinance. The cash out refinance is I'm

getting a whole new mortgage, right, with closing costs. And then, of course, those closing costs,

you have to, it's a brand new mortgage. So you're paying

thousands of dollars to get a new mortgage. And yes, you're getting a lump sum payment from the bank in this,

in this transaction. But now you've got a new interest rate and you've, essentially, you're starting

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