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Stephanie Brown
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BRRR with Rising Rates?

Stephanie Brown
Posted May 19 2022, 00:38

Hi there,

I purchased my first rental in January and am ready to go for #2! I want to make sure I employ the right strategy. What makes sense with interest rates so high? HELOC on my primary? Refinancing doesn't feel like the right play at this point. I am a novice but a quick study. Any advice on how to drum up cash for #2 would be amazing, thank you

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Scott E.
  • Developer
  • Scottsdale, AZ
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Scott E.
  • Developer
  • Scottsdale, AZ
Replied May 19 2022, 07:03

A cash out refinance will come with a new payment today that you need to pay every month, regardless of whether or not you find another deal.

A HELOC won't come with a payment until you take a draw but the rate is typically variable (like a credit card).

This is a personal preference as to what the right debt strategy is for you. My choice would be HELOC.

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Nicole Heasley Beitenman
Pro Member
#4 Medium-Term Rentals Contributor
  • Lender
  • Youngstown, OH
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Nicole Heasley Beitenman
Pro Member
#4 Medium-Term Rentals Contributor
  • Lender
  • Youngstown, OH
Replied May 19 2022, 07:05
Quote from @Scott E.:

A cash out refinance will come with a new payment today that you need to pay every month, regardless of whether or not you find another deal.

A HELOC won't come with a payment until you take a draw but the rate is typically variable (like a credit card).

This is a personal preference as to what the right debt strategy is for you. My choice would be HELOC.

Agreed. In this market where it takes longer to find a deal (or better, create a deal), you don't want that payment hanging over your head.
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