Heloc to renovate then cash out refi. Good idea?

[Tiffany Makiya]

I would like to pull out some equity from my primary property so I can start investing in real estate, but my house is in need of some renovation. Is it a good idea to take out a Heloc to do the renovation, then refinance after hoping that the renovation added a decent amount of equity to the property? My estimated property value is $1,300,0000. Remaining balance $400,000. Estimated cost of renovation $300,000. Any advice would be appreciated. 

[Clayton Silva]

Hey Tiffany, this is a great question. We help clients determine which route makes the most sense all the time! One of the best tools out there is a blended rate calculator that can help you determine if HELOC or cashout makes more sense. In your case, my gut tells me just do one cash out refinance rather than a HELOC into a refinance because it will save you from paying two sets of closing costs and title fees. We are licensed in HI and I would be happy to do a free consultation to see which option makes more sense for you. Hope this helps!