Pay off Home Mortgage or...?

[Kody Brown]

Hey Everyone, 

First time poster, long time reader... I have an interesting question as to what strategy will work best. 

Some background...

My wife and I own a small business and we are planning on selling it. We stand to clear around 115k-125k from the sale. I want to roll this into rental properties. My first thought was just to simply use this cash as a down payment on multiple SF's or MF's,  but then I got the idea of paying off my home mortgage with the cash.  

Stay with me...

We owe about 125k on our house in a good (rental) neighborhood, and could see being there for at least another 5 years. If we paid off our home mortgage, we would cut our monthly expenses by about $1,000. I would then take out a HELOC to invest in rental property. At 80% LTV this would be around 130K to borrow

This strategy makes sense to me because it decreases my expenses while having around the same amount of money to invest. I know I would get significantly lower cash flow, but this would protect me from getting burnt if an investment went bad. 

At the end of the day, the money borrowed would equate to my initial mortgage cost.  ( I think, right?)

Also, when we decide to move, we would have a paid off property that would spit out about $1200 a month in cash flow.

Is this a good idea? Most everything I find online says to NOT pay off your mortgage. 

Any thoughts would be appreciated!