Cash out refinance OR line of credit?

[Alex Stariha]

Hi everyone new to bigger pockets and hoping I can find some help. I'm a young guy just starting to invest and in my mind I have a few options but don't know what the best way to go is for long term investing. I've got a 3 unit in chicago right now that's an fha loan that has 25% equity in it today. Then I have 4 single family homes in Indiana three of which I own free and clear. I want to purchase more but don't know if I should cash out refinance the 3 SFH's or get a line of credit on them.

[Michael Facchini]

Line of credit is a variable rate. You have the ability to pull the money/principal out again after you've paid it down. So if the intention is to pull money in and out over time, kind of like a credit card, and you're ok with rate fluctuation, the HELOC is the choice.

However, if you are thinking more long-term, want a fixed rate, and you can take specific dollar amounts and put them in play in the near future, a cash-out refinance on one or several homes is the way to go. Make sense?