Acceptable Way to apply Home Mortgage interest to investment Prop?
Scenerio: - early retiree with LONG background in income / investment props.
Primary house currently paid off.
BUT HIGH equity / low cost basis, Too nice to sell in a DOWN market. (gorgeous view).
Investment prop loans roll every 5 yrs and are TOUGH to get in today's market. (7+%)
so... I want to Get a 30 yr mortgage on house, and use it as a BANK to finance my rental / investment properties.
I want to DEDUCT mortgage interest as INCOME / INVESTMENT INTEREST.
(= far more bang for the buck... direct offset to income vs, 'diluted deduction'
for home mortgage (which will probably go away anyway).
I have been doing this via HELOCs for yrs, as I can show a direct monetary trail that the HELOC covered my investment property.
I cannot figure out how to show a direct trail from underlying mortgage SECURED on personal residence to Income Properties...
Please Help me figure out how to legitimately (in the eyes of IRS) do this.
BTW:... I have several investment props PAID off, so not planning to loose home, but...
LTV will be ~ 30% on Primary, so not planning to loose home.
Will keep a HELOC on extra home value, so I can grab good deals on other properties (strict discipline of restricting RE equity to RE purchases)
I like the idea of 3.5% money for 30 yrs to fund my 'investment RE.'
With NO WAGE income, AND all my annual gifting (contributions) coming from a family foundation, it is unlikely I will be meeting Std Deduction,
thus no benefit to claiming 'home interest deduction'