BRRRR Method Using HELOC with Rising Interest Rates

[Paul Sanchez]

Hi BP community,

I am considering using a HELOC for a 50k down payment on a four-plex. The discounted off market price is 330k with the estimated fair market value at 390k. The mortgage broker has assured me some banks they work with will refinance at 85% LTV.

I am concerned with the refinance after the seasoning period. I have already talked to my refi mortgage broker, have pre-qualified and planned the future refinance in advance, however I am concerned with rising interest rates over the next 6 mo. There is a chance that my refi rate will be higher than the rate at which I bought the house at.

Is this method advisable given probable rising interest rates?

Thanks for any advice in advance!