Cash Out ReFI OR HELOC?

[Joshua Heath]

Greetings All!

It’s been a long time since I’ve been on the forums. Seeking your guidance/wisdom. A little about me: 

U.S. Army vet. Recently moved from Lynchburg, VA to Parrish Florida in December 2020. 5-yr goals for REI can be seen on my profile. Almost 100% of my REI will be done out of state due to current FL prices.

Regarding our home, we purchased it at $275k with a 5% dp due to the first homebuyer FHA loan (I believe our interest rate was at 2.9%). The market has since sky rocketed in our local area, with comps in the area for a 3/2, ~1800 sf being between $340-375k with barely any updates/upgrades. I've been told by several companies that I can:

1) ReFI with the VA and get 90/10 value, which ends up with me getting a lot of $$$. Pro: lots of cash to work with for offers/acquisition/rehabs/etc. Con: Once it's used, it's gone. I also don't know if funds get taxed due to the refi. Need help there.

2) ReFI for a better rate and then get a HELOC. Pro: I now have all this equity to use for future projects and can pay it back like a credit card. Con: 80/20 equity split and I'm unsure of what needs to happen for next steps.
  
I have a lot of head knowledge but I’m drawing blanks as to what I should do. Hope I didn’t scare/bore anyone to death. Genuinely excited and willing to learn on ways to improve my approach. Looking forward to what you’ll provide.

Respectfully,

Josh H.