HELOC for Turnkey or BRRRR???

[Bryan Malone]

Considering taking out a HELOC on primary residence to purchase 1st rental property. Lender is offering fixed rate on the HELOC as long as the account is open for 3 years. Would it be better to use the proceeds on a turnkey property or find a fixer upper and use the HELOC as a down payment and later refinance using the BRRRR method? I like the concept of turnkey because I don't have the time myself to put into fixing it up but would consider bringing on a partner that is willing manage that portion of the deal. Thoughts???

[Ali Boone]

Well the other thing to consider though is your experience level. People make BRRRRing out to be this super-easy anyone-can-do-it strategy but it's not that straightforward. And especially if you're talking about bringing on a partner, who will that be? That's just another iron in the fire. And if on top of it you don't have that much time to focus on it...

Assuming you have equity in that property, does it have to be a HELOC? What about a cash-out refinance? Then there's no time component to it.

Financing aside, if you're just interested in comparing the two options of strategy, here's some things to think about-

https://www.biggerpockets.com/blog/buy-rehab-turnk...

Hope that helps!