HELOC on primary residence vs rental property

[Evan Gohring]

Hi team,

I am currently house hacking and renting by the room (house 1). We are under contract on another house (house 2) that we will turn into our primary residence, eventually STR, and our current househack will just become a rental property. It would be nice to have spare money for updates on house 2 upon closing. House 1 has a good amount of equity and would love to tap into that equity with a HELOC.

What would be the best/correct way and timing to get a HELOC for house 1?

Seems like options are :

1) Try to get a HELOC on house 1 while it is still a primary residence before closing on house 2. Are there any complications with a HELOC on a house that was initially primary residence then later becomes a renal?

2) Wait until closed on house 2 then apply for HELOC on house 1 (now a rental property).

Thanks team,

Evan