appropriate usage of HELOC

[Rafael Dimayuga]

Hello,

I used a portion of my HELOC a couple of years ago to invest in a property development. That property won't sell for another couple of years and I messed up and didn't lock in when rates were low and am now paying triple on the interest only payment. The HELOC is just under 9% now. I'm thinking of just waiting 2-3 years until that investment finally matures but at the same time have been considering getting at least one rental unit going as I still have the remainder of my HELOC I can use for a down payment. I don't know how I would get a rental unit in the Seattle area but maybe an out of state one might be more beginner friendly. Any advice is appreciated.

[Conner Olsen]

Quote from @Rafael Dimayuga:

Hello,

I used a portion of my HELOC a couple of years ago to invest in a property development. That property won't sell for another couple of years and I messed up and didn't lock in when rates were low and am now paying triple on the interest only payment. The HELOC is just under 9% now. I'm thinking of just waiting 2-3 years until that investment finally matures but at the same time have been considering getting at least one rental unit going as I still have the remainder of my HELOC I can use for a down payment. I don't know how I would get a rental unit in the Seattle area but maybe an out of state one might be more beginner friendly. Any advice is appreciated.

I would pay off the 9% interest debt. That's a pretty high cost for an investment that hasn't paid out yet and the returns are unknown.