What should we do regarding financing.

[Tyson Boeckman]

Bigger Pocket friends I have a question for you! We have purchased a property via online auction and should be closing in the coming weeks. We are purchasing the house with cash. Now I am a real estate appraiser and I know the house and location and that we have purchased the house right with instant equity. There is a few ways we can do this but my wife and I would like to see what everyone else has to say. 

We can refinance and get all of our cash back out and rent it and make about $150-200 positive cash flow after expenses and the renters would be paying down our mortgage for us.

We could do a HELOC as we do not need the cash on hand but if something came up we would be able to pull some money out. The HELOC is good for 5 years.

Or should we leave our cash in and just rent the property out and make about $450-500 a mo after expenses. This is about a 12-13% cash on cash return with our money.

We are trying to save on taxes as I am an independent contractor and with my income I end up writing a $25,000 check to the IRS every year.

We would like to know what you would do? And Why? Or is there a better option that you would recommend.

Our lender does not require us to hold the house for any certain period of time before refinancing and we live in Western Iowa if that helps.

Thanks Everyone.

[David Zheng]

@Scott Matthew C. I think you missed an important detail. He said if he refinances his money out, he will get all of his invested cash back and STILL make $150-$200 a month without adding any value. I'd take these no money down investments all day.