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Leanne Pressly
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HELOC, construction loan or use my cash for new build?

Leanne Pressly
Posted Sep 12 2018, 07:32

I'm planning on building a $275K rental project starting in April 2019. I am conflicted about where is the smartest place to pull funds and would like opinions? I have $175 invested in stocks in my taxable account and another 30-50K in cash coming out of my business at year end. I could also do a HELOC at 5% (for about $150K) or get a construction loan at 6% and convert to fixed later.

If this were your project, how would you pull the funds?

Some of my assumptions:

1) The market will correct soon. If I need any cash out now, I should take it in September or October before the election

2) I did make gains on the investments so I'll need to pay tax on that. I'm in the 25% bracket. (This year I made 40% return and 15% over 5 years so I did really well)

3) My money in the market COULD keep earning above what I pay in interest? Maybe not if the correction is steep enough

4) Interest deductions are going away with new tax law correct?

THANKS! I love this group, Leanne

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