Vehicles for saving and funding your REI
What vehicles or strategies does everyone recommend to fund their Real Estate Investments? I'm specifically looking to what should I do with the money I am saving? I have a 457 I put money into that I can leverage, but after that where should it go? Brokerage account? High Yield Savings Account? Overfunding a Whole Life Insurance Policy?
I currently also have a Primary Residence I can do a HELOC on, and some stocks I can loan against. However, I am struggling with how to pay off said loans if I go with those strategies.
Thank You!
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If you take a loan out of a 457, you are not leveraging. Your principal balance is lowered and you are paying back principal and interest back to yourself. Not only your money is only working at one place at the same time, but you can't also deduct the interest or you will have to recognize the interest income too.
You can borrow on margin on taxable brokerage account, but it is very risky as when the market drop, you get a margin call and risk getting liquidated with amplified loss if you can't put the money back immediately...
The better equivalent would be a HELOC on your property.