Question - Conventional fixed rate mortgage or HELOC?

[Toby Ng]

Hi all,

I am a newbie in real estate investing. While looking for my first rental property (or properties) with total cost of ~$100,000, I talked to a local bank to see what are my options. Here is what they told me. Can anyone please comment on which one makes more sense. Thanks!

1. traditional fixed rate mortgage - 30 yr, 4.5%

2. pay cash, then get a HELOC of $90,000, 10 years, 3.75% variable (p+0.5%)

As a rookie, I am not sure which is a better option. Would greatly appreciate any advice from you all.