Cash out Refi vs HELOC?
This may be the type of question a few of you may call me an idiot for asking, but give me some slack here, this is my first ever investment property.
I have been searching around Bigger Pockets and asking friends/coworkers and cannot get a good straight forward answer to this question.
I am in the final steps (and paperwork) for buying a duplex using cash. I want to use that property to not only generate income but also leverage the equity in it to buy another rental property. I am very new to investing, but my decided niche (for now) will be buy and hold small multifamily homes. I want to know what people think on either pulling a HELOC on this home (I will not live in it so a 70% value is best I can get) or doing a Cash Out Refi on this home. Here is where I struggle. If I do a Cash Out Refi the monthly payments would be higher than a HELOC. The money saved on the HELOC allows me to build more capital for another purchase at a higher price point faster (and having less debt). I also like the idea of not being locked into a principle+interest payment each month (in-case of vacancy). A Cash Out Refi should offer me more cash up front allowing me to buy at a higher price point right away, but down the line I am worried about issues of holding more than 4 mortgage loans and the increased cost of a portfolio lender. Any ideas/advice?