20k cash, pay down current mortgage and use HELOC for BRRRR?

[Derek Thompson]

So I have some old 401ks that i'm planning on cashing out (I know that's a little alarming but after tons of debating and research I think its the best use of the funds) to use on my first BRRRR. I was planning on just using the cash but I thought that maybe it would make sense to pay down a mortgage on a home I already own. I am planing on investing in the eastern Ohio area (Canton, Massillon,Wooster, Green springs, Rittman Etc.) and already own a home in Brewster that i'm renting to my sister while living/working in Western WA. Looking at homes in the 20k-40k range with ARV's of 75k-90k+.

My current mortgage has 67k left on it and the home should be worth 90-100k. I know that using a HELOC is a popular strategy to use with BRRRR's so I thought I would see what the community has to say!

Also if anyone has any suggestions for for folks to work with in the area send me a PM!

Thanks!

[David Barnett]

So, you are planning to cash out your 401k, use the proceeds to pay down your mortgage and then take out a HELOC to use for BRRRR? That doesn't make a whole lot of sense from my perspective. It sounds like you are making this more complicated than it needs to be. I don't think you should cash out your 401k, however, if you are going that route, why not use the 401k proceeds for the BRRRR?