Difference between Refi and Equity Loan?

[Max Maysonet]

I'm no property owner but I'm currently searching for my first House Hack.

I'm trying to learn as much as I can and I'm curious as to what would be a smarter way to go about liquidating funds for capital growth?

Let's say I rehab a multi-family (originally financed with a conventional loan), Should I refinance? Or just take a loan on the equity? Is it the same thing? Is it different? if so, How? Is a 1031 possible on both?

I have an idea, but I want to hear the thoughts of BiggerPockets.

Thanks!

[Scott Wolf]

@Max Maysonet, let's address this one by one.

If you house-hack a MF that needs some renovation, you can sell and 1031 if you have held the property for long enough(usually at least a year).  

A refi will get you the equity back in your hands, but you will be responsible for a monthly payment on it (hopefully mostly covered by your tenants).

A HELOC will give you access to that equity, but you'll only pay for it when you actually use it(and that rate can change).

The situation will depend on how much your renovations and ARV are, and how badly you want to lock in a low rate, and if you want to sell it, or hold forever.