All Forum Posts by: J Rhodes

I'm in a similar situation. I'm leaning towards using a HELOC vs a home equity loan because the HELOC is there and open. The interest rates will be a little higher than the home equity loan but the funds are more readily available so you have a little more flex when looking for your investment property and the line of credit is there to help cover other expenses that may pop up.

And I'm no expert (still trying to figure this part out) but I believe once you close and get the home rented out you can refinance the home and if the numbers work out then you can get your down payment back to pay off your HELOC by tying it into the rentals refi at a lower fixed rate.

I’m currently living in my second live in flip. I sold my first one to fund my current one. I live in a somewhat expensive market. I have probably somewhere close to $80k in equity. Here are my thoughts:

1. Renting out current house - cash flow about $600 a month vs $80k down payment on my next house if I sold only reducing monthly payment by maybe $400 a month. I have access to VA loan so I really don't need a down payment and don't need to worry about mortgage insurance.

2. Use my equity to purchase an investment property using a HELOC and stay put in my current house for a few years. Doing this in my market is rough. Lots of competition and tight profit margins. Not sure if it's entirely worth it.

3. ?? Open to other ideas.