To BRRRR or Not to BRRRR

[Brett Baginski]

Currently I have 2 single family rentals and my primary residence. For the past 2 rentals, I've used my interest only HELOC, which had about $50k available for DP and repairs, then just paid it back quickly, not really incurring too much interest expenses.

Now I am about to refi my HELOC and will have more than enough to buy and rehab a property all cash in the market I am currently looking in. But interest costs have really gone up, about 9.4% on my last HELOC statement.

Is there any benefit to buying all cash and then refinancing after the property is rehabbed? If I used $100k of the HELOC, it would cost me about $780 a month in interest until I can rehab and refi. I'm guessing this might be a good strategy though if I can find a good deal (70% rule) and get most of my money back out.

Or do I continue to just buy with 20% down and pay out of pocket for repairs to get it rent ready? I can still buy about 2 properties a year using this strategy and not take on the interest expense from the HELOC. Conservatively 3 months to rehab/rent/refi about $2,350.

Any suggestions or insight is really appreciated.