HELOC or Refinance personal home?

[Shane W. Chapin]

Like most new investors, I am working on building capital in order to properly fund my first deal. I have a good amount of equity in my personal home and have a 2 part question to pose here: 1- Is using equity from my home to use towards the purchase of a rental proprty a good idea? 2-If so, would you reccomend refinancing and take cash out or get a HELOC?

[Kevin Romines]

It depends? I know that's a vague answer, but really depends on your overall game plan? Ask yourself, will I have a need for an ongoing line of credit? Is my game plan to flip or buy and hold? Do I feel confident that I can and will pay down a line of credit so that I can use the line again in the future or will this be a one time shot?

My guess is that if your getting your investment career off the ground, you will most likely need the line of credit. Something you can charge up and pay down over and over again. I'm assuming you wont just buy 1 unit, but rather many over time. Based on that, the HELOC seems to make the most sense.

However if you only need cash 1 time, then your better off doing a cash out refinance, with better fixed rates. 

I hope this helps?