HELOC , Home equity, or refinance advice

[Spencer Harvey]

Hello,

I am looking for input on the best way to finance my next rental property. 

I currently own 2 rentals; one with 20% down ($45k) and the other with 25% down ($50k)...both properties have a conventional mortgage for the remaining value ($105k and $150k). My primary residence had a downpayment of $58k with a mortgage of 230k which is now down to around $215k.

I do not have any additional funds available in order to make a downpayment on another investment property, but I am looking to move forward and purchase more units as soon as possible. I researched HELOC, home equity loans, and cash out refinance, but I am fairly new to this and I'm not sure which option is best in my situation.

What do you recommend? Any input would be appreciated!

Spencer

[Ivory Hayes]

I for one am in support of utilizing a heloc vs any other method of accessing cash. Loans just aren't a better product in my opinion. With a Heloc you can access and utilize the money over and over again without having to reapply for it every time you need it. The payments are extremely low because it's an interest only payment. If you utilize a heloc correctly and make it your new checking account, by sitting your monthly income inside of it that, it alone acts as the monthly payment, plus anything over the monthly interest payment gets applied directly towards paying down your principal. So the next month your payment will be lower than it was the month before because you're being charged interest on the remaining balance every month not the total amount of funds received. You basically have a diminishing monthly payment and more of your funds go towards paying down the principal every month and you can access the money right away if you need to. To me it's just a far better tool and strategy to use but again, that's just my personal opinion and everyone is entitled to their own.

Happy Investing...