Line of Credit/Cash Out on paid for well seasoned investment prop

[John C.]

Looking for a low cost way to pull some cash out on paid for investment property in Gwinnett County Georgia. Owned for over a decade. Free and clear. Great credit and reserves. No more than 70% LTV. Rents are high and stable. Anybody done this recently? What options are available these days?

[Chris Mason]

The basic answer to the HELOC v cash out refinance question is that it depends on when you intend to use the funds. HELOCs are ARMs but you pay nothing if the balance is at $0, whereas a cash out refinance is fixed but so is your payment even if you haven't used the funds.

So if it's something with a lot of turn-over, like flipping, HELOCs are better.

If it'll be something long term that you don't quickly pay off, like buy and hold, cash out refinances are better.