HELOC vs Cash out refinance? Which is the better option?

[Kevin O'Bryan]

Hello, and thank you for taking time to read my question.  I have never dealt with a bank or broker for mortgage services.  I paid cash for a tax sale property 4 years ago.  I did a substantial remodel with out of pocket money.  I now live in this two bed, one bath 1,100 sq foot house. My realtor friend told me I could get 110K+ if I sold it today.  I bought the house across the street two years ago in a tax sale.  I paid 20K for it.  I have it gutted and I'm working with a contractor.  My rehab budget is $50-60K.  What are the best options to finance house #2?  The house will be a short term rental when it is complete.  I own both houses free and clear.  Again, thanks for your time.

[Kerry Baird]

HELOCs are adjustable after a few years, in most cases.  Some adjust after 5 years, and other after 10.  But some start right off adjusting.  Look at the post above, @David Krulac gives sound advice.  Use 30 year fixed money where you plan on holding, skip those adjusting HELOCs and (obviously) have a plan to pay funds back.