How would you use a $50k HELOC?

[Matthew Barbey]

New member here! The situation: currently own a primary residence with 90k equity, went and opened a brand new shiny HELOC with an available balance of $50,000 at 8% (adjustable so 8% for now). Savings enough for an emergency fund so really don't want to touch it. My current P&I is $875 and if I were to rent it in my area for what I have I could seemingly get around $1700-1900.

My question: where would you go from here? Do I attempt to find a suitable BRRR? Do I buy a modestly priced house to live in that needs a little TLC and rent my current house out for cash flow? The multitude of options, the state of market, the current interest rates. I'm really suffering from analysis paralysis if I'm being honest. I want to make the jump in to my journey to financial freedom but it's scary especially when you have a family to support. Appreciate any insightful words of motivation anyone could give, cross posted so sorry if you see this on any other BP communities!

[Nathan Gesner]

Quote from @Matthew Barbey:

What is a HELOC? It's an opportunity to borrow money, sort of like a credit card. If you borrow $30,000 to buy a $150,000 house, you're borrowing $150,000 to buy the house and that $30,000 from the HELOC is at a higher interest rate than the $120,000 mortgage on the investment.

I know HELOCs are pushed on the forums, but it's just another way of borrowing money to borrow money. It is just as likely to cause over-leverage and put you in a bad spot. If things don't work out, you could screw up your investment and your personal home.

My preference is to leave the HELOC as your reserve/emergency funding. Save money and use that to purchase property.