Payoff HELOC or grow capital?

[Jerad Grace]

I just recently bought my first duplex using HELOC from my primary residence as the down payment (approx. $32,000 @ 3% int). My cash flow from the property is projected to be $250/month (after all expenses/maintenance/repairs, etc.) Made a payment on HELOC for $100 and the interest was $78 ($22 to principle).

Should I use the $250/month cash flow to pay down the HELOC or throw everything I can at the HELOC to pay it off as soon as possible, or should I make minimum payments and let the cash flow from my duplex build up along with my W2 job savings to purchase a 2nd property?

1. Use cash flow to cover payments?

2. Pay off the HELOC ASAP with cash flow and W2 income

3. Make minimum payments and build equity to purchase 2nd rental property

[Tyler Demeter]

Hey Jerad, great job on buying your first duplex. I'm not a guru on investing but i've got some ideas.

1. Cash flow is usually designed to make YOU money, not the banks. They will get theirs.

2.Just like Robert Kiyosaki states "Pay yourself first" 

3. If you save your money from both sources (Duplex-W2) and buy another unit (SFH, MFH) then that will make the payments for your HELOC. Let the snowball grow.

It is sort of changing the mindset of getting out of the rat race.

Hope this helps and good luck!