What's the Mortgage Paydown Sweet-Spot?

[Cliff T.]

Purchase Price: $30k

Down Payment: 20% or $6k

Mortgage Amount: $24k

APR: 5.5%

Term: 15 years

Repairs: $8k

ARV: $40k-ish

Rent: $700

QUESTION: How much should I pay down this loan right off the bat with a 1.99% HELOC of $30k?

I just bought this deal (my first one) and am currently making the repairs. A local credit union just started a nice HELOC program so I'm jumping on it and figured paying down (or off?) this new investment property mortgage is a worth-while consideration. However, I do not know what strategy I should employ here. How do I calculate how much I should pay down to keep a good COCROI? What do you guys consider the sweet-spot to be?

Thanks to all! 

[Chris Mason]

1.99% is free money relative to inflation. All of it. Don't even get a mortgage at the point of purchase, be a cash buyer. If you want to free up the HELOC later, slap a mortgage on the property to pay the HELOC down.