HELOC vs Refinancing

[Brandon Rauscher]

Can anyone explain the pro's and con's of refinancing vs HELOC on a rental property you own free and clear?

The goal is to continue to purchase more properties, utilizing capital as efficiently as possible.

[Brandon Rauscher]

Update on my personal experience with this. I went ahead and secured a HELOC. I then utilized the heloc for flipping one property and to BRRRR another. The strategy worked well for us. I currently do not have a project going on, the heloc is paid in full and waiting for the next deal to come along. With that said, one downfall I did notice with the heloc strategy is, my credit score dropped significantly while the heloc was maxed out during our renovation period. Fortunately my credit was strong enough to weather the storm and I was still able to refinance the BRRRR property. However the credit score drop was not expected and could have landed me in a tight spot if the credit dropped to a point in which I was unable to refinance. lesson learned, hopefully this helps someone else out as well.