HELOC VS CASH OUT REFI ??

[Max Lopatin]

For those of you using the BRRR strategy (Buy, rehab, rent, refinance, repeat). My questions is when you refinance, are most of you doing cash outs or HELOC and why?

My thoughts are:

- If you use a HELOC (home equity line of credit) to invest as a down payment the additional payment might not let you cashflow.

- If you do a cash out refi, won't that add to your original mortgage killing all your equity and adding more debt?

I would love to hear everyone's thoughts. Thanks in advance.