HELOC to Buy Rental Properties
Hello BP community! As a longtime REI, I am in a decent place. But I would like to scale further and increase my cash flow. Hoping you could review my situation and provide your thoughts.
I was recently able to add two HELOCs on a couple of paid off rental properties, in addition to the HELOC on my primary. My total HELOC available is $450K.
I am looking to buy SFRs in the $125K range. I am stuck as to whether I should:
A. Buy 2-3 properties using my HELOCs as cash purchases, or
B. Buy 8-10 properties using BRRR strategy. Buy cash then delayed financing once tenants are placed.
My current cash flow available to pay down the HELOCs/Mortgages would be $4,000 monthly, plus whatever positive cash flow is generated by the acquired properties.
If I went with Option A and bought 2 SFRs for $250K, I could pay back $5,500 monthly towards the HELOC (plus simple interest)
That is the easier math. Where I could use some insight is if I took a bigger leap and went with Option B. How would that play out?
Is there a better strategy I should use then either one I have listed?
Thanks!