The choice of using HELOC and other equity is a way of diversification.
The $400k of liquid assets, a portion of it is emergency funds and the rest of it is 401k, Roth, IRA, and other investments making good money. So the $400k is called for. Also, there are tax disadvantages if I use the $400k for real estate.
The idea is to make all of your money work harder for you. The liquid assets are holding their own. The equity in the real properties are generating a decent return and then our household income exceeds our expenses.
Even the choice of going to Huntsville is an exercise in diversification.
I have thought of cashing in my entire 401k and using it to invest in real estate, but even that is too risky for me. It is better to have it as a way to diversify the entire investments that I have.
