Cash-out Refi vs HELOC?

[Adam Stroik]

Greetings BP!

I posted a previous question regarding using equity in a SFH rental I have in San Diego. Its worth 500k and I owe 220k. It is in a 15 year loan with 9 years left. previous question was let it ride or use that equity. overwhelming majority were in favor of using that equity.

now the question is, what are peoples opinions on using a equity loan vs HELOC vs cash out refi? at 80%LTV I can get 100K. 90% I'm at 165K. Even had a few interest only quotes to keep costs down...any thoughts? I've found a few HELOCs in the 4.5-5% range a few HELOCs I've found are variable rate (not a big fan). what are your thoughts? what are some terms y'all have found. anything else I should be considering? thanks

[Brian Barfoot]

A big advantage I see in HELOCs is flexibility. Because you only pay on what you borrow it means that you have less cash sitting around while you're finishing the next deal. With a cash-out you have to pay interest on the whole sum even if it takes you some time to close on the next purchase. In my experience a HELOC will have a lower rate too but as you said, there is the risk of rising rates.