How to pay off HELOC used on investment property

[Kwok Wong]

Hello everyone, I am getting a HELOC for my first investment property. I want to hold on the property and make it short term rental, no intention of selling it in probably at least 10 years. However, after all the expenses, it's enough to cover the interest of the HELOC but not principle. Is there a strategy to pay off the home equity loan? Please advise.

[Kapono Kobylanski]

Hi again, 

I will ask my friend the numbers on that property and the Ilikai. I shopped around for HELOCs in Feb 22 and I was surprised to find the BOH was actually the best for us. We are already banking /w BOH and our first HELOC was BOH long ago and that was a good experience. You can move money back and forth from your checking to the HELOC. Or at least pay off the Heloc /w online banking.

We compared BOH /w Aloha Pacific CU, HI state CU, and HI cental PCU. We tried to get a 250k HELOC but we got much less than that. The rate is 1.75% for 36 months. My understanding is that in less than 36 months I can just get another HELOC to keep the rate low? Or maybe that was the option when the balance was mostly zero like it was /w my first HELOC. I used all of this HELOC as a down payment for my investment property so I'm not sure if I can do it with this Heloc. My hope is I can refi the new property in 36 months and that will take care of this issue before the HELOC rate becomes variable. In any case, the new property cashflows pretty well and the home I have the HELOC on is in town in Hawaii so there are slim chances it will go down in value ever. I refinanced that one when rates were crazy low and with no points got a 2.9% rate. I house hack that property and the rent on the little side studio pay for most of that mortgage. I'm a novice so what do I know, BUT, I think I'll be ok even if I hit variable rate and can't get out of it. If all else fails I could pick up a few more hours at work but I really don't see that happening. Please let me know if I am very wrong :)