Buying out someone else's HELOC?

[Justin M.]

I have a friend who is in a situation that I have not experienced before. This person has a primary residence with a good amount of equity in it, and took out an interest only HELOC for $125k (10yr interest/10yr payoff). They used the $125k as part of a down payment on a new house with the intention of selling the original primary residence then paying off the HELOC.

However, the original house has been on the market for 3-4 months and not getting much buyer interest, while costing a lot of money (double mortgages + heloc). Fortunately, they were able to get it rented for enough to cover the 1st mortgage and HELOC payments. The bad thing is, that HELOC payment is just a giant interest payment when it could be cash flow if it was a P&I loan.

I am trying to think of creative ways to get out of the HELOC and get that money financed into a conventional loan or something else. Is it possible for someone to buy out their HELOC and get a % return on the money, or maybe partial equity value? I don't know if there is a market for that like note investing or something else. So, looking for opinions or options here.