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Updated almost 5 years ago,
HELOC VS CASHOUT VS SELLING
Hi Bigger Pockets Community,
Very green to this and just looking for some ideas/advice/things to stay away from. Here is my question: My father purchased a home with cash in San Antonio Tx about 5 years ago for 240k, the house recently appraised for 320K. The property is completely paid off and has an excellent tenant in place paying 2,400 a month in rent. My dad recently asked me to help him sell the house so we can purchase another house closer to home, maybe somewhere in Vegas or Phoenix. Rather than selling the house I advised him that we take out a Cashout Refi and purchase another home or two or a duplex etc and begin building a portfolio using brrrr. Do ya'll think this is a wise idea? Is it smart to take on a mortgage when the house is paid for free and clear? Is a cashout refi the better option vs a heloc? Should we purchase more than two properties with the $ we get from equity and take out mortgages on those putting 20% down? Would love to hear ideas. I want to begin brainstorming so I can learn as much as I can before making any sort of recs to anyone. Thanks so much!