HELOC on Investment Property

[Elisa Duka]

Hello BP friends! 

I'd really appreciate opinions and advice on a timely matter that I'm currently facing. I own a condo free and clear and am looking to do a HELOC for $35k on it for a down payment on another property.

Question is: The HELOC for $35k has a 1.99% for the first 12 months then 5.50% (Yikes!). It's a 15 year HELOC and the draw period is 5 years, which are interest only. I do save a lot considering there are no closing costs or pre-payment penalties or inactivity fees.

What do you guys think? 

[Darren Eady]

@Elisa Duka

Too many people miss out on deals because they are worried about the cost of their loan or the interest rate.  You can end up tripping over dollars to save pennies.  I lend hard money and I've heard many times that someone will make $40,000 on a deal but won't do it because the lend wants $9,000 of their profits.  So they take nothing instead of netting $31,000.  

Historically 5.5% is a fantastic interest rate.  No need to even ask about a no-brainer like that on an investment property!