HELOC for Rehab in the BRRRR or Flip strategy

[Jonathan Safa]

Hi guys, 

What are your thoughts of getting a Home Equity Line of Credit to pay for the rehab costs in a BRRR-type property or even a flip?

In my mind the pros are: I can use the credit for just a month or two while the house is being rehabbed before either a Cash-Out Refinance, or the proceeds from the sale of the flip. I can do an interest-only payment, and get rid of the debt without really even paying a payment on the home... 

Cons could include, early repayment penalty, negatively affecting credit score (not a big deal to me), obviously more debt against the home. 

Thoughts? 

[Bob Okenwa]

I'm in the same boat and was looking into doing what you said. Since it would be short term money, I feel the risk is lesser but still there nonetheless. If I can find a lender to work with me, I'd pull that trigger in a heartbeat.