HELOC then Refinance?

[Han Jaewon]

Hi BP community,

I'm seeking to purhchase the real estate investment, and need some advice on financing options. 

My Situation:
- My spouse & I own two properties worth $600k, $200 fully paid.

- Our combined after-tax income is $170k annually.

- We have no outstanding mortgage debt.

Recently, we discussed financing options with a banker at PNC and learned that we might qualify for a HELOC up to $480k, albeit with a relatively high minimum interest rate of 9.31%. Our plan was to use this HELOC to secure off-market deals from wholesalers and then pursue refinancing.

Concerns and Seeking Advice:
However, I've read discussions, indicating potential challenges in refinancing when a significant portion of DTI is tied up in a HELOC.

Given our situation, I am keen on understanding:

1. Is using a HELOC for purchasing and then refinancing a viable strategy, or does the impact on DTI make it less feasible?

2.  If you have navigated a similar path, what strategies or precautions would you recommend to mitigate financial risks and ensure a smooth refinancing process?

3. Are there alternative financing methods we should consider that align well with our financial standing and investment goals?

I appreciate the shared knowledge and experiences on this platform and look forward to your valuable insights.

Thank you!