HELOC or Cash Out Refi? Free up cash for next deal

[Jennifer Walsh]

I own a rental property free and clear. Do I get a HELOC or Cash Out Refi?

I plan on doing another deal, not sure what just yet, interested in BRRRR or STR. I like the idea of a HELOC so Im not paying unnecessary interest on a bank note while Im looking for my next property. However, having a loan locked in also has its benefits.

Help! I'm a newer investor and unsure what makes the most sense right now. Thank you! 

[Josh Mitchell]

@Jennifer Walsh I think it really comes down to what you are comfortable with. The HELOC provides a great opportunity to give you that revolving working capital, but will come at a higher interest rate than say a 30 year mortgage would. I would tend to lean toward cash out refinancing to take advantage of these historically low interest rates we currently have. Also, the cash you pull out is tax free!! Just make sure you are still cash flowing after taking out the amount you want, and you should be ready to purchase the next property!! Good luck!