Updated 3 months ago on . Most recent reply
HELOC or Home Loan to get my first investment property
A little context. I own my home free and clear no mortgage. I want to use my equity to purchase another single family home and rent it out as a long term rental investment. I spoke with my bank and they said I can use 80% of my home's equity for a HELOC at around 8% interest. My question is fairly straightforward. Should I use the 80% equity and purchase another single family home outright free and clear and then have the tenants pay off the HELOC through my rental income? Or should I use a Home Loan and cash out and get the full amount and purchase another single family home and rent that out using that rental income to pay off the Home Loan? Any advice or suggestions would be greatly appreciated. I have experience as a landlord, before I moved back into my home currently I rented it out for a couple of years. Not much experience but it is some. I'm looking to take my Real Estate Investment to the next level, no more time to waste. Thanks!
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#2 Creative Real Estate Financing Contributor
- Lender
- Charleston, SC
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#2 Creative Real Estate Financing Contributor
- Lender
- Charleston, SC
Cashout refi over heloc. You'll get much better terms than with a heloc and you wont have the risk of the line being converted.
- Patrick Roberts
