HELOC or refinance for live in flip

[Richard Poarch]

Hello, this is my first post on bigger pockets. I have read many articles in the form and I have also read books BRRR, the flipping framework and the book on flipping houses, in addition to listening to the podcast for the past a few months. Experience wise I did work with my father flipping 4 houses as a teen through 2006-2008. Just trying to educate myself on how to best utilize my situation. So I was lucky enough to purchase a house in Thornton Colorado in 2015. My house is valued at approximately 400,000 and I owe 200,000 currently. I have a small three bedroom one bath on a third of an acre, one of the bigger lots in my area. A two car garage and a large driveway could easily fit six trucks plus a lot of off street parking. We live in a great school district That is very attractive for families. I also have no HOA. After considering my options, I have decided to go with a value add fix and flip. I know I can get 250,000 profit tax-free and so that would be my target. houses similar to mine are currently selling between 400 and 450,000 and if I add one room and one bath turning my house into a four bed two bath, which is extremely rare in my neighborhood I see comparable selling for 500- 600k. To do the value add fix and flip I would need to access my equity and this is where I'm having a hard time deciding what would be my better option doing a HELOC or a refinance. From my perspective, I have a timeline of six months that I would like to accomplish this so the turnaround it's pretty short making a HELOC acceptable. Are there any considerations or red flags that I might not be noticing? Are there any benefits to doing a refinance that I am unaware of that would make it a better option than the HELOC for my situation?