HELOC on 100% owned investment property - cash buyer strategy

[Daniel Hsieh]

Asking for help from experienced investors.

We are buying and rehabbing an investment property for Airbnb. It will be an all cash deal so I can minimize the financing fees (buying and refi) paid to hard money lender. I plan to pull the money out using HELOC. My rationale is that HELOC has much lower closing costs than traditional loan and hard money.

My question is would credit unions approve HELOC based on ARV or will the HELOC be based on the purchase price of the property, excluding rehab costs. If HELOC is limited up to 70-75% of the purchase price of the property, then my plan won't work as I will have way too much money stuck in the deal.

If this HELOC strategy won't make the financial sense, I guess I just need to cough up closing costs (initial purchase and refi) to the hard money lenders as all of them have programs that can refi up to 75% of ARV after I got the property renovated.

Worth asking what strategy do most cash buyers use to pull the money out? 

Thanks so much in advance.