Line of Credit or Cash Out Refi?

[Diab Shetayh]

if a property is fully paid off, is it better to do a cash out refi or line of credit if you’re looking to reinvest that equity into real estate?

[Chris Mason]

Originally posted by @Diab Shetayh:

if a property is fully paid off, is it better to do a cash out refi or line of credit if you’re looking to reinvest that equity into real estate?

 HELOCs are i/o ARMs at higher rates. But you can draw on it and pay it off and draw on it and pay it off. Model match for short term repeat use debt, like a flipper's rehab budget.

A cash out refinance will be an amortized fixed interest rate that is lower. Model match for long term one time  use debt, such as buy and hold.