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Updated almost 6 years ago on . Most recent reply

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15
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Zach Hawrot
1
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15
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Using a HELOC instead of refinancing on a BRRRR...

Zach Hawrot
Posted

After meeting with my bank, I told them I wanted to refinance my duplex after I made the proper renovations. They advised since the duplex was cheap to start at 25k that it would make better sense to take out a HELOC against the property after renovations were done. Their pitch was this:

I would have to pay 2-3k in fees to get it refinanced whereas the HELOC would be free through them and that even though the HELOC would be 2-3% higher rate, it would take years to make up for what I would pay in closing costs. And at that time I could simply do a portfolio refinance loan with all of my other properties I BRRRR'ed through HELOCs.

Besides having to find more banks since there seems to be a limit on HELOCs, can anyone steer me why this would be a good/bad strategy when compared to traditionally refinancing with closing costs attached? 

Thanks!

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