Both. 401k collateralized by 401k. The rest is unsecured. I used to have a Heloc, but I sold that house.
If you're willing to share @tomsang , I would like to hear more about your unsecured LOCs. Do you have several smaller ones or a couple larger ones? With the big banks or small banks/credit unions? Did you have previous banking relationships with the institutions beforehand?
There was a really nice triplex that I saw yesterday where a cash offer would have/could be of significant advantage. While I was touring it and talking with my realtor, the conversation on here came to mind.
This thread lays out a bit about what I have done to make money using debt:
https://forum.mrmoneymustache.com/welcome-to-the-forum/dream-house-foreclosed-on-by-bank-need-250k-cash-to-buy-how/msg1933318/#msg1933318Anytime I am in a situation where I don't believe that I will be needing credit(credit score), I actively look to expand my credit and credit denominator. IE, apply for additional credit cards and lines of credits. During that phase, my credit score may drop by 30 points or so, but typically it rocks back up within a few months. In some cases higher than when I started as my utilization decreased as I increased my denominator.
There are hundreds of banks and credit unions in any given city. The trick is to see who has unsecured LOC's. Not all do. In some case it makes sense to open a deposit account there and then go back six months or more to apply for the LOC. I currently have Wells Fargo, BECU, Bank of America. Not too obviously to me, it is easy to get an unsecured credit card, but harder to get an unsecured LOC. So if you are trying to get these lined up before apply for credit cards.
BECU also offers a great rate for the first $500 of savings and checking. Currently they are giving out 6.17% APY. So a no brainer to drop $500 in wait a year and go back and ask for an unsecured LOC.
https://www.becu.org/landing/member-advantage. I am sure other credit unions have starter rates as well.
I am fortunate that I have been employed at the same place for 20 years, make a great living, and have flawless payment history. So, I am able to go in and get $50k LOC or credit cards. Typically I ask for more, but they usually come back at $50k. Probably a banking thing.
The other thing that I thought was interesting is when I use a zero interest rate check for 18 months. They ask what you are using it for. I found that when I explained that I am going to buy a rental house, they had more issues vs. if I said that I am going to consolidate debt. So now I tell them that I am going to consolidate debt, which makes it easier.
Between wife and I, we have approximately $450k in unsecured LOC's and credit cards. We also have $100k in access to 401k loans. We also have over a million in home equity that we can tap, with more hassle.
My average cost of debt is in the low 4% by utilizing the zero interest for 18 months credit card checks as well as some favorable credit card rates. Unless, I am buying something significant all credit cards are paid off in full each month. Typically, I can have large purchases paid off or refinanced into 4% mortgages within 6 months.
If you use a Line of Credit or Credit Card 100% for an investment purchase, then you may be able to expense the interest paid. Don't taint the interest by throwing a coffee on the balance. :)
So with that being said, my checking account is typically zero as I can usually find a LOC to pay down saving me 4% to 7%. I also tend to go buy something if I have money in my account and unused LOC's.
I have had years where two or more opportunities have got me excited enough to jump on and other years where nothing has been exciting enough. Patience is key, having your access to debt ahead of time is key, having the ability to evaluate opportunities and reject most opportunities is key.
Good luck!