HELOC or Cash-out refi?

[Ashly B.]

I understand the difference between the two, just curious if there's a reason to choose one over another. Current mortgage is for $60k at  around 3.5%. House was valued at $100k when I bought it a year ago. After $50k of renovations, I'd like to roll up some of the debt I took on from renovations and take out additional for my next investment. I've done a little market research and think it will value between $200-250k (its hard to find comparables for a 4-plex so I'm struggling to get a closer dollar amount...not sure how much comparable number of units plays in?). Anyway, since the house was worth less when I took out the original mortgage does that impact the amount I'd be able to pull or do they reappraise either way so doesn't really matter?

[Ashly B.]

Originally posted by @Andrew K.:

Ashly B. May not answer your question directly but I'm working on getting a HELOC on one of my properties. I like the HELOC as I plan on using it like a checking account to fund portions of other projects.

I'll rinse and repeat for as long as the HELOC is viable. Gives me the flexibility to put a large chunk down on a property or purchase materials for a rehab.

Good luck and keep us posted!

-Andrew

Good point. I have about $30k i want to immediately roll in from renovations but I may not buy my next place for 4-6 months... Probably makes more sense to do a HELOC in that scenario otherwise I'm going to be paying interest on the cash I'm sitting on, and honestly won't know how much I need until it gets closer.