Looking for Advice - Opportunities in Financing for a Beginner

[Michael Semcken]

I am currently renovating a duplex in Denver, Colorado.  I purchased the duplex in May and began renovations in June with a completion date around mid-September.  

After the renovations are complete, I plan to get an immediate reappraisal and rent out one side of the duplex while I live on the other side.  My goal is to purchase another multifamily to move into over the next 6 months to a year using the equity in the duplex. 

In terms of finances this is where I stand: 

- 120,000 in HELOC for the renovations - 10 years of interest-only payments

- 30,000 in credit cards that have been put on payment plans over the next 18 months - overall I will only pay an additional 3000 paying off the CCs this way

- Potential property value increases between 150,000 to 300,000 after appraisal (based on loose comparable sales of properties in my area)

The way I see it I have a couple of financing options for the next property assuming I use the potential new property value to do so, which leads to my question for the BP forum - 

How should I finance the next property?

- Do a full refinance and pull the cash out of the property for the next downpayment?  (My current rate is 4.75%)

- Up the value of my HELOC and use that for the next downpayment?

- Any other lending opportunity I have not thought of?

There are a lot of pros and cons to each strategy, but I'm interested in hearing your opinions.  Has anybody used these strategies?

Also, given the current status of the housing market, does anybody see a real estate bubble popping over the next year?  And if so, where would you position yourself if you were in my shoes?

[Andrew Postell]

@Michael Semcken I'm not a fan of waiting.  If you waited 1 year ago, you are worse off now.  If you waited 6 months ago, you are worse off now.  I know what it looks like now - so I would suggest at least getting preqalified now.  It's free, its good for 4 months, and it tells us the information we need to make a decision.  Just get the "fill in the blank" portion of your scenario completed and I think that will tell you what to do.