[Insight Requested] Leveraging Investment Property - LOC/Mortgage

[Sam Ronkin]

Hello, I was hoping to get some insight and guidance from someone who has taken out a line of credit or a mortgage out of an investment property to make further investments.

Here is the scenario: 2 Bedroom Apartment Valued between $150-200k. Cash flowing $15k/year.

Thinking about taking out a 100k mortgage (Rate: 5-6%) or line of credit against this investment property to make an investment in a REIT doing about 9.5% a year, net fees. In 10 years, the mortgage gets paid back in full and the compounded profit is around 40k.

Risk: The REIT could underperform or lose value.

Thoughts? How would others proceed? Anything you would do differently? Suggestions?

Much appreciated!