HELOC or Savings for a downpayment

[Karun Pillay]

I am going to invest in a second rental and needed some advice on whether to use savings for the down payment or HELOC and keep the savings as emergency fund. Thanks for any advice you can provide.

[Zach Rucker]

@Karun Pillay

Run the numbers on paying interest on the HELOC. Figure out the timeline for the deal and when you refinance the deal will you be able to pay off the HELOC? Try to find out all those numbers and if the deal works with great returns then you can use the HELOC. It just depends on your strategy and your situation and how the numbers look.

I'm using a HELOC on a potential BRRR strategy myself, paying interest on it hurts our returns but without the HELOC we would not have been able to do the deal because it also covered the rehab.