HELOC for new project?

[Katie Huynh]

I don't know much about HELOC and have never taken out this loan. But my plan is I'm going to take out HELOC of my current home to purchase a fixer property, then refinance the property after 90 days to pay back HELOC and turn the property into a rental. Is it a doable strategy? Is it a good plan? What do you think?

[Dan Barli]

Have you spoken to a lender about the HELOC for your current home yet? The first thing you should find out is if you can get a HELOC and for how much. Then you can determine if you are able to acquire a fixer-upper. How will you finance your purchase? Would it be straight cash using the HELOC? If not, are you using a conventional mortgage? I would suggest you make sure you have the end refinance lined up before you pull the trigger and purchase the property. If all the things line up, then this is a good strategy to use.