Using home equity to purchase Land

[Nicholas Garcia]

Hello all, Nick here.

Question is how do I successfully purchase Land in my state (MAINE) using equity from my first property - maybe using HELOC?

With housing in our market selling above asking price most times ending up in a bidding war with limited capital to invest, I am thinking about buying land and maybe sub dividing that land and building a Modular home on the plot. Does anyone have experience doing any of these things? What would be the best approach..

Would love any help/input! Thanks in advance - I appreciate your time.

[Amy A.]

Keep in mind that a HELOC has an adjustable rate, so is fine if you plan to use it short term for a flip or just want it available for opportunities. However, if you plan to hold the property long term, you should do a cash out refinance at a fixed rate. Also, make sure you understand how to subdivide land. It's not always as simple as you'd think, with zoning and wetland issues often making it expensive.