Best way to use HELOC
I am new to investing. I have not yet made my first deal. My wife and I will have our primary residence paid off next month, and I'm looking at how best to utilize that equity to begin investing. Depending on the percentage of equity I can borrow, I could pay cash for a rental, refinance and pay off the HELOC. Or I could use a lesser amount as a down payment on a fixer upper and use the BRRRR method. Any input, recommendations, etc? Like I said, I'm a total newbie.
If you purchase cash, then you can only do delayed financing, which will only return the amount you used to purchase the property so you wouldn't be able to fully pay of the home using the HELOC.
You may want to consider using the BRRRR method as you have a chance to fully recover your funds in the refi if you get a good enough deal. Also, you can scale a little faster if you use leverage.