Newbie here with a HELOC question

[Kimberly Ranz]

Hi there- I am about to make an offer on my first EVER home purchase to fix&flip. I am definitely GREEN- but I have been studying, listening, and picking brains of the REI pro's in my network here in Cincinnati. I have my pro forma bases covered and things look good. I'm excited, I'm a little nervous, and I'm totally into it!

I'm wondering if there are any other possibilities for funding the flip. I am in the process of getting an HELOC for 3.49%- so it would make sense to fund the purchase and repair with that - (my husband bought our current house before we were married- we used it as a rental for 5 yeas while we were both working in Cbus. Later, moved back in, renovated it, and are sitting on a good amount of equity). I am not certain, but I also read that some HELOC interest may be tax deductible- anyone know if this applies to real estate flips? Would there be any benefit to getting a mortgage on the flip to free up the HELOC for other things? A fixed 30 year mortgage at 4-5%?

Any insight appreciated! :) 

[Ned Carey]

@Kimberly Ranz the rules for deduction interest on helocs and refinancing has changed and I believe has become more restrictive. That said interest for an investment is deductible. You have to make sure the interest you pay for the rehab is separated from any personal use of the HELOC.