HELOC accellarated strategy

3 Replies

I am a new landlord and been thinking about utilizing all income my W2 and Rental with HELOC to help pay my mortgages faster. I am a decent saver, and enjoy a minimalist lifestyle. Been thinking "what if" I put everything into a HELOC checking. leave my emergency fund alone, never touch that. But no more saving, everything goes into HELOC account. which of course i would periodically make large principal payments on my main home's mortgage, then eventually rental mortgages.

Would you think it would be safe to even put the rental expenses into HELOC. ie the 3% to 4% tucked away for vacancy, and repairs. Idea being use all income against the HELOC. If vacancy happens, or repairs at that time take it out of the HELOC. Which would not be ideal, but would be draining the 4% savings anyway, to just fill back up.

same with spending on my hobbies, no saving up for that wheel set for my bike, just use HELOC. of course I would need self control and force myself to not overspend. Could mean a cashflow difference of good 1,500 to 2,000 monthly nipping away at the HELOC "payment".

Oy vey. Not the "accelerated" strategy posts again. 

You can do any of that but it doesn't depend on a HELOC to work. You can just pay down the mortgages with your proceeds if you want. You can use the HELOC to do it but you won't be accelerating anything, you'll just be moving money around into different buckets.

About once a year this "strategy" comes up. Guys that are phenoms with spreadsheets have demonstrated that this is just mental gymnastics.