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Updated about 6 years ago,
Best move with HELOC funds
I recently closed on my first HELOC after acquiring this property from BRRRR'ing my owner occupy duplex. I purchased the building for 80k with conventional investment financing- put about 11k into it and got the upstairs unit rented. The downstairs tenant has been in the building for 25 years and pays below market rent.
rents- $625 2 bedroom
$750 1 bedroom
PITI- $750/ month. This buy is a long term and once I can renovate the lower unit and add a bedroom I will be able to pull 1k/ month.
I owe 59k on the building and was able to pull a 36k HELOC- I want to use these funds and invest with them.. DTI is fine with heloc payment included..
I guess my question is... what is the best way to use heloc funds? I am unable to buy a building cash with what I have at this point. Is using a heloc as a downpayment smart? I don't fully understand the exit strategy with paying of the heloc if I use for a buy and hold. Should I use the funds to aid in a flip for "short term money" and build up my liquid?
Any thoughts, ideas ect will be helpful and thank you. (Sorry if this post is all over the place)
Thanks BP