Best financing option for first flip

[Dan N.]

I have been considering my financing options for my first flip now and haven't been able to determine the best course of action, any input would be much appreciated.

I'm figuring my first project will have a purchase price of around 75-100k, and will need 20-35k worth of work. It seems likely my first deal will come from hud or a fannie/freddie reo based on what i've seen so far.

So. Our house is paid for, i'm sure we wouldn't have issues getting a heloc, but at the same time we would be putting our biggest asset on the line and i'm not exactly jumping for joy to do that. Another possible option would be credit cards? We have a lot of available credit on cards with rates in the 6-7% range, maybe using that as a down payment or to finance rehab costs? Another option that might work is my wife has an old ira and has never purchased a home. i think i read somewhere once that you can use ira money without taking the early withdrawal penalty if your a first time home buyer? she would fit that bill, but i wouldn't. That could probably cover a 20% down payment in my expected purchase range. I don't think i have the stomach for hml's.

I realize that not knowing our exact financial situation and having minimal data makes this a difficult task to comment on, but any thoughts may help. I do plan on sitting down with our banker in the coming weeks to discuss options.

Thanks.

[Dan N.]

@David Beard Man, i feel like you just handed me a nice check reminding me of the tax deduction for the heloc, thank you. That makes swallowing the risk a little easier. Any thoughts on a particular order as far as acquiring these lines? heloc first then the unsecured lines or vice versa?