House Hack HELOC BRRR? Creative Financing Bonanza

[Zane Lyons]

Hi all,

Hoping for some thoughts and advice on a financing strategy I am hoping to use on my first house hack.

I purchased a SFH with a MIL duplex that is paying 2/3 of my mortgage.

I paid using a 10% conventional owner-occupied mortgage. 

Purchase price: $400k (I paid $40k down, so $360k loan) - The house appraised for $430k (16% equity).

ARV: $525K

Reno: my higher-end estimate is $50K.

I plan to fund these renovations largely with a 95 or 100% LTV HELOC loan.

After this, I get a little stuck and can’t quite wrap my head around things.

If I can cash-out refi 80% at 525K is this true:

Cash out $420k (525 * 80%), pay off the $410k loan ($360k conventional loan + $50k heloc), $10K cash for next down payment?

At this point, would I be able to use that $10k, open a new HELOC (or re-draw from the old one) to fund a future down payment? This is my understanding of the concepts, though it is quite complex so any insight on this strategy would be very valuable. Thanks in advance <3