Can you Cash out Refi after using a HELOC to Rehab a property?

[Doug Hardy]

I have partnered with a capital investor to start BRRRR-ing properties. He already owns a rental property that needs some work. To begin, we are looking at BRRRR-ing his current rental property but we would be skipping the "Buy" part since he's owned it for a long time. It's not a total piece of crap, but it certainly has a lot of room to improve the value given the market that it is in. My question is - Can we use a HELOC to fund the rehab, then cash out Refinance the property at the AFR to pay back the HELOC and use the remaining funds to look for our next BRRRR project?

Our original plan was for him to fund the rehab with cash, then ReFi it and use the ReFi cash to go find our next BRRRR property. If it's possible, using a HELOC seems like a better way for him not to have to use his personal cash.

Thanks in advance for your input!