I am in the process of securing a HELOC against my home to start buy and hold rental investment. I was advised to use the HELOC to buy a property outright to get "in the game" and see how it all works (as long as the numbers work). As a beginner my questions will be rudimentary.
If I buy a property for approx 100k and put 10k-15k in for renovations, how do I access the equity in the property after a seasoning period? Would I get a regular mortgage? What would be the best way to refinance, and how does this affect my HELOC repayments? I hope this makes sense.
@Darren Roskott , using a HELOC is a common strategy.
Yes, you recapture your capital through a regular mortgage. This is basically the BRRRR method. Using your example above, ideally your property appraises for $154k+ so you can get your money out while maintaining 25% equity. After refi you pay back the HELOC and you're ready to do your next deal.
Thank you Jaysen, I appreciate the information.
Have a great weekend.