No Mortgage on Rental; Use Cash or HELOC for expansion?

[Tavares L.]

Hi Everyone,

Rookie Question here.

I have mortgage-free SFH rental property in San Antonio, TX that generates $1300/month ($1000 after Exps), w/ an assessed value of $165K.

Questions: Is it more beneficial to use a HELOC versus CASH for a 20% downpayment (approx $40K) to purchase a Duplex?

Any thoughts or ideas are welcome. 

[Harjeet Bhatti]

@Tavares Lumpkin HELOC would be good option for down payment because of lower or no closing cost but interest rate will be higher so make sure you have plan how soon you can pay off.