Pay down and heloc equity for new investment or bank rents

1 Reply

Hello all:

I am looking to purchase a small apartment complex, up to 10 units.

I am also wanting to set myself up for future investments as well.

Is it best to take the rents and pay down the mortgage, then when ready for the next investment property borrow that equity.

Or bank all the rents and use when ready for next property?

I am wondering from a financial standpoint. Obviously paying down mortgage will save me in interest but ties up the money and isn’t as liquid as money in the bank. Also I would think there are also tax benefits.

Any insight is appreciated.

So let me get this straight.  Your choice is between:

A) - Spend your cash flow on the equity your tenant is already buying for you (as in giving the money right back with no gain), then buying it back REFI or HELOC) when you want to use it later (next property).


B) - Keeping it in the bank (or CD, or some other short term paper investment) and using it later (next property) for free.

Tough choice.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you