Updated over 6 years ago on . Most recent reply
Opinions for paying paying down debt vs. remaining leveraged
I've been going back and forth over what to do and would appreciate any feedback.
A couple months ago we purchased a SFH with cash and an unsecured credit line ($20,000). The line is interest monthly with a variable interest rate - currently 6.5%. My options are as follows:
1. Deplete brokerage account to pay off line of credit. This would leave us very short on cash temporarily until more could be saved up. I've had this account for about 19 months and currently has gained $700 in value.
2. Take out a long-term fixed loan on the property in the amount to pay off credit line.
3. Utilize BRRR method and cash out 80% of ARV on house.
More info.
Purchase Price = $42,575
Closing Costs = $950
Rehab = ~4,000
ARV = I am thinking close to $60,000
Note - I am not "flipping" this house - using as a rental. I think I will be able to get between $700-$750 in rent.