Should I get a HELOC?

[Jean-Thierry Aleman]

Hey gang, we just bought a condo (not our primary residence) for 50k with cash. We did this so that we could make a stronger offer than our multiple competitors who were offering more $$s but with financing. In any case, I am now trying to decide if I should go for the long term low interest rate of cash-out refi or should I get a line of credit against it? We are thinking to try a flip next but ultimately, we are planning on getting more rentals, so the money will get used one way or another. Not sure where to go from here?? All thoughts, strategies, input welcome.

Thanks--JT

[Kyle J.]

You might have some difficulty finding a lender who will do either.  Most lenders won't do cash-out refi's under $50k and most lenders also won't do HELOCs on investment properties.  However, there are lenders who do both.  They're just not common so you'll have to call around.

If you decide to do a cash-out refi, you'll probably have better luck with a portfolio lender due to the small amount of the loan. 

I'd probably go for a HELOC because you shouldn't have any issues with the small amount and so you're only paying interest on the money when you actually use it. You'll just need to find one that does them on investment properties. If you decide to go that route, here's some questions to ask when calling around: What You Need to Know When Shopping for a HELOC.