Using HELOC for BRRRR Strategy – Legal & Financing Implications?

[Arthur Tolentino]

Hey BP community,

I'm considering paying off the mortgage on a property jointly owned by my mother and me. It’s her primary residence, and she’s retired—so paying it off would ease her monthly expenses. I have enough stock I can liquidate to cover the remaining mortgage balance.

My goal is twofold:

1. Help her financially.

2. Unlock access to a larger HELOC that I can use to fund future BRRRR deals.

Here’s the plan I’m considering:

Pay off the mortgage in full.

Use the HELOC (secured against this property) to fund the full purchase price of another investment property.

Pay for the rehab with my own cash.

Refinance after rehab to force appreciation and repay the HELOC + some rehab costs.

I spoke with a loan officer who mentioned that since my mother is the primary resident, she must be the primary borrower on the HELOC. That makes sense, but here's where it gets more complex:

If I pay off the mortgage, I’d essentially be covering 95% of the property’s value. This could trigger gift tax issues unless I update the ownership percentage accordingly.

If I do adjust ownership to reflect my financial contribution, are there any implications for the HELOC (since my mother needs to remain the primary borrower as the resident)?

Would love to hear from anyone who’s navigated a similar scenario or has insight on:

Using HELOCs as 100% financing for BRRRR.

Legal/tax implications of adjusting ownership on a jointly-owned primary residence.

Structuring this to avoid unintended tax consequences while keeping financing options open.

Appreciate your input!