How should I invest a $100K mixed between a 401K and a HELOC?

[Nate Pummel]

Hi everyone,

I'm a new investor (zero properties) in Denver and I've been reading books, the forums and listening to the podcasts like crazy for about 6 months. I'm almost ready to buy my first property but I'm not sure entirely on how to start. I know there have been some great posts about how to start with $100K cash and the like but I'm wondering how you would start if you had $100K mixed between borrowing against a 401(k) and using a HELOC on my primary residence. The 401(k) I can borrow at a 4.5% interest rate and the HELOC is at 5.39% on a 10 year draw.

I wanted to start small (to minimize my risk) and do the BRRR strategy which led me to looking into purchasing my first property in Indiana. I feel the Colorado market is too prohibitive based on the cost for someone just starting out. But at the same time I think doing the BRRR from out-of-state for a newbie will be extremely tough.

Ultimately, I would love to buy two properties this year with the intent of refinancing in a year or two to repay my 401K/HELOC and then repeat.

I guess this is a really long way to ask, how would your strategy change if you had $100K 401K/HELOC instead of cash?

Thanks everyone!