Cash or HELOC?

[Amanda Chandler]

Hi all. Question for you as I am not sure what makes the most sense. 

In a blessed situation to have been able to save up some cash reserves and have a HELOC that is interest only for 10 years. Rate on the HELOC is variable from 1.99-18%, but, I can lock any "draw" at the current rate, which currently is around 8%. Given how affordable this money is, with the goal being to have 10-20 properties (depending on cash flow), does it make more sense to use cash to fund a couple deals or HELOC? I would be doing 20-25% down and then a conventional loan.

Thank you for any feedback!

[Jesse L. Weaver]

Quote from @Amanda Chandler:

Hi all. Question for you as I am not sure what makes the most sense. 

In a blessed situation to have been able to save up some cash reserves and have a HELOC that is interest only for 10 years. Rate on the HELOC is variable from 1.99-18%, but, I can lock any "draw" at the current rate, which currently is around 8%. Given how affordable this money is, with the goal being to have 10-20 properties (depending on cash flow), does it make more sense to use cash to fund a couple deals or HELOC? I would be doing 20-25% down and then a conventional loan.

Thank you for any feedback!

 Hello Amanda, 

No one likes paying interest if they don't have to! As long as you are keeping enough in reserves, use the cash and put that 8% in your pocket. Or towards the next deal.