To sell or to HELOC

[Mathew Morford]

I need some advice. I bought my primary back in April of 2021. I love my property, but I want to get into real estate and I think I could possibly leverage my equity some how. 

I owe about $115k(ish) on the property. Zillow shows $215k, realtor.com shows $213k, but that’s without knowing any of the improvements I’ve made on the property. 

Is it worth selling and using the possible large amount of equity to buy a rental property or should I HELOC and maybe buy a rental property? Or am I even going about it in a good way? I just need some ideas.

I just had my first new born son and I’m wanting to start getting into real estate so I can spend more time with him in the future where it counts. 

[Adam Oldham]

@Mathew Morford I would probably lean towards accessing a HELOC if you can get favorable terms. What I like about the HELOC regardless of whether you use it or not is that it doesn't cost you anything to have(besides a nominal setup fee usually) but then you are able to use it at your discretion. Second, if you sell your current house and tap into that equity you still have to buy another house for your primary which seems like a lot of work, you're going to be buying both houses(primary & rental) at higher interest rate than you bought your primary in 2021. Third, you probably have a great interest rate that I would not want to give up unless a screaming deal came along.

If you can access 30-50k from your HELOC you should be able to put that as a down payment on another investment property, just don't forget to factor in this extra payment in your ROI calculations for the rental.