Heloc or hard money loan for a brrrr method

Member since 2022 · 7 posts · 3 votes

I have $75 k in equity is a residence I own. If I’m wanting to buy a $60k residence needing $15k in rehab. Is it better to get a hard money loan for the purchase and rehab and get the down payment from a heloc loan from my original residence. Or should I just get the whole loan for $75k from my heloc

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Andrew Garcia
Lender · Charlotte, NC · Member since 2022 · 739 posts · 410 votes
4y
Hi @Brodie J Meaux, I am assuming that you are going to sell the property 6 months after you buy (flip) or rent and refinance (BRRRR).
Either way, it is a short-term use of funds so a HELOC is probably your best bet.
The HELOC is going to have much better rates and fees compared to hard money.
The issue that you would run into is that you cannot access all the equity in your home. HELOCs typically go to 90%.
However, if you would like a referral to a lender that can do a HELOC at 97.5%, please let me know.
Hope this helps! Let me know if I can be of any assistance.
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Moses Bowie Russ
Investor · Philadelphia/Charlotte/Raleigh/SD and LA Counties · Member since 2019 · 34 posts · 15 votes
4y
I would rate shop and put the numbers in a spreadsheet.
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Catherine Coy
Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
4y
These days, credit unions have the best rates on HELOCs.
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