Heloc vs line of credit? is there Better Options?

[Aaron Rushton]

im looking for advice on financing a purchase. we were hoping to use as little of our money to buy a house and use the BRRR method. Were looking at using a Heloc as a down payment but its a variable 10.25% APR for 5 years or 9.87% for 10 years and we have to pull 100K on first draw. of course we can put back what we don't use. We also might be able to open a line of credit for a business and have 0% APR for the first two years. in saying this here my question.

1. are these the average APR for a Heloc?

2. should i try the line of credit and refinance and pay off before the 0%

3. any other suggestions?

thank you all for helping a newb out.

[Nicholas L.]

@Aaron Rushton

i know your questions are very focused on the HELOC but... there are lots of aspects to a BRRRR, and financing is only one of them.

and if you use borrowed funds for 100% of everything then yes, that's potentially less cash out of pocket, but it also increases the overall cost of your project, putting more pressure on the appraisal and refinance.  BRRRRs are really tough right now with interest rates high, rents flat, contractors booked up, and tremendous competition for deals.

i always get nervous with HELOCs as down payment because it can mean that you're not well capitalized.  not saying that's you - maybe you're in a strong financial position and ready to rock and roll.  but that's always my first thought.