Interest deductions and cash Vs. financing

[Jean Sanchez]

Hi Everyone!

I have recently gone under contract for my first duplex in Indiana and it is a cash deal for $75,000. I could not get a conventional mortgage for 2 reasons: a.) the loan amount was too small; b.) we just moved and I am between jobs. I have been trying to study up on tax law and I understand that there are no tax incentives or really financial incentives to buying a property all cash (except the equity piece) and I also know that refinancing will be challenging given that even ARV will be in the low range, but I am wondering if I can get the same tax interest benefits if I can get a HELOC on the property and use that to make down payments on further property? For what I have read the interest on HELOCs on investment property are still deductible, so wouldn't that be the same tax advantage as I would get if I had traditionally financed or refinanced (maybe even better since my HELOC will likely be at a higher interest rate)? I hope that wasn't too convoluted. Thanks for any advice in advance!!