It's a finance institute of one form or fashion, they will use it if it's in there best interest, and that means the person who holds the button to drop that ax.

What about rate and term refinancing?

You also implied that we don't specifically price deals for our clients and the client's "rates and fees will be much higher".

When evaluating markets for rental properties, there are a lot of factors to consider: population growth, employment rates, rent to price ratio/GRM/Cap Rate, rent trends, vacancy rates, etc. 

Reason is a Heloc generally carries a higher rate on a shorter term and "Can Never" be used as an "Asset, or for PITI reserves" which are both required when you buy an investment property. 

As-is cap rate of 7.5% in my market (kc) would be pretty awesome to buy. 

At the pro forma income, the cap rate would rise to 8%, which is more reasonable but only achievable after renovations.

Is it to lower rate?

You would end up saving the higher interest rate on the HELOC as well as closing costs.

This is most of the depreciation you are taking year one.You can calculate your depreciation recapture by taking the sale price of the asset and subtracting the adjusted cost basis.The adjusted cost basis is what you paid for the asset plus any improvements you made along the way minus the depreciation you took along the way.The profit above this original cost is taxed as a capital gain, but the part linked to depreciation is taxed at a maximum rate of 25% under the unrecaptured gains of section 1250.To recap the tax rates are:- Sec. 1250 real property: 25%- Sec. 1245 property and 15 year 1250 property: Ordinary Tax RatesThere are ways to minimize depreciation recapture especially if you know how to work smart with your CPA.1) Asset Valuation at Time of Sale - Sellers can minimize recapture by reallocating the price of the assets on sale.