Paying down debt vs. continuing leverage

[Virginia Jones]

I've been going back and forth over what to do and would appreciate any feedback.

A couple months ago we purchased a SFH with cash and an unsecured credit line ($20,000). The line is interest monthly with a variable interest rate - currently 6.5%. My options are as follows:

1. Deplete brokerage account to pay off line of credit. This would leave us very short on cash temporarily until more could be saved up. I've had this account for about 19 months and currently has gained $700 in value.

2. Take out a long-term fixed loan on the property in the amount to pay off credit line.

3. Utilize BRRR method and cash out 80% of ARV on house.

More info.

Purchase Price = $42,575

Closing Costs = $950

Rehab = ~4,000

ARV = I am thinking close to $60,000

Note - I am not "flipping" this house - using as a rental. I think I will be able to get between $700-$750 in rent.

[Daniel Kong]

@Virginia Jones I like the idea of cashing out your brokerage account to pay off your line. Paying off the line is a guaranteed 6.5% return on your 30k (since you wont be paying it anymore) versus a possible 5-7 in the stock market which could even go down while you are looking for your next deal. Just my opinion.