Using equity from primary residence to put down payment on multi-family investment
My broker mentioned seeing I have cash to put down on an investment property, rather than using the cash, use the line of credit on the equity and put the savings in a "safe" investment fund or somewhere that I could liquidate and pay down line of credit if rates start to jump, etc.
Is this something recommended? Anyone have any thoughts on why/why not this would be a good or bad idea (besides the obvious "don't spend the cash").
Johnny
I think it is a great idea. I've done it, and it works out well. If you have solid W-2, income you can actually spend the cash AND use the equity (ie. buy 2 investments!) It is a little riskier, but it depends on your interest rate outlook. With solid W-2 income, you can gradually pay off the HELOC as rates gradually go up. Good luck!