please critique...

[Joe Boggin]

im a fan of rentals. i like the cash flow monthly. i have a property free and clear and i want to use the equity to obtain a second property. the reason i want a second property is to get the cash flow again. two rentals with one debt service equals nice margins for me...

hear me out...

if i take out a home equity loan i will have a fixed payment over 10 years but my profit margin after the debt service will be limited, however i will own the property free and clear after the term. if i take the line of credit i will only have to make minimum payments over the ten years which will give me low payments and a larger profit margin but i will own nothing after the term is done and i will be forced to sell the property to pay back the equity line...

what would you suggest?

[David Beard]

Hey, Joe, I would suggest that you take out a 30-year conventional mortgage on the existing property for as much as you can, then use that money as down payments on as many properties as possible. Rates are still at epic lows, lock 'em in now and you'll be on the path to wealth and a comfortable retirement.