Should I use Home Equity Loan, HELOC, or Cash out REFI?

[Keith N.]

I own a duplex that I bought 2.5 years ago. I lived in it at first, but now both sides are rented and I live elsewhere. I used an FHA loan to purchase it at 180K, but now I'm confident that it's worth at least 230K (the area has appreciated quite a bit).... I also own 1 other rental but that's irrelevant I suppose.

I want to pull money out of the duplex which I will probably use to finance another buy and hold rental property.  OR just hang on to the chunk of money available until I decide to pull the trigger on another business idea.

What is my best option for doing so. I see the most people like HELOC because it is "most flexible." But would a Home Equity Loan or Cash out REFI make more sense in my scenario? I'm ready to take action on this soon, as I've had this planned for a while. I know that I can already get a HELOC/Home Equity loan from PENFED as long as my house appraises high enough.

[Edward B.]

@Keith N., I have not seen any mortgage products (HELOC, HEL, or 1sts) what will go over 75% to 80% CLTV on investment property. That means you do not have enough equity in the duplex to pull money out.

To answer your question, though, which course of action you choose really depends on what you plan to do with the money. As you mentioned, I like the HELOC because of the flexibility, which makes it ideal for BRRRR and rehabs where you can cycle the money over an over and it costs you nothing when you aren't using it. It you plan to use it for a down payment on another property, though, I would probably go refi first to lock in the lower rates and HEL last, if at all.