Best way to Refi a property, just purchased w/HELOC

[Jan Fensterer]

Hello-

I have purchased and successfully flipped properties- This particular one came out of the blue- Any thoughts, advice would be greatly appreciated. We purchased a property before it came on market- Looks like it was underpriced by $30-$35k- The home needs nothing.

Utilized our HELOC- Cash deal closes on June 12th- Lot's of home building in the area- It will bring more in as an executive Rental, for possible people needing a place to live while their home is being built- or AirBNB-

AirBNB- I'll have more tax rite off- My HELOC is at a crazy low rate right now- 2.50%- Total current payment of (non deductible interest) under $500.- This property has good potential to bring in $2,500 per month as AirBNB or as I said- people waiting on their home build-

I have to waiting for 6 month Season, to get a mortgage- BUT- this current interest is crazy low.

This is a keep and hold- I have my eye on the property next door- Suggestions? Or is it obvious to keep the HELOC, until I chunk down on the house?

Talked w/banker- They told me they will do an appraisal and look at purchase price- they will go w/whatever is lower- Purchase was $199k- Worth about $240k-

I want to do some kind of cash out refi, so I do not have to tie up $50k-

Thoughts?

Thanks group. :)

[Julie McCoy]

@Jan Fensterer Why not just keep it on the HELOC? 2.5% interest-only is a way better payment than you're going to get on a traditional mortgage, even with rates being what they are, and you can chunk it down with the rents it brings in. Then you don't have closing costs, you have more flexibility with your payments (pay as much as possible each month, or just do interest-only if it's a tight month), and as long as you're disciplined about it you can pay it off a lot faster too.