Using a HELOC instead of refinancing on a BRRRR...
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!