HELOC on a property I'm about to sell

3 Replies

Hey BP!

I'm flipping a SFH in the Arlington Area of Jacksonville (32207) that I bought for cash. The property isn't going to be able to go on the market until at least mid january, meaning if it sells immediately we won't be closing until at least February. There are a few properties I'm looking to purchase in January with cash, but a lot of my cash is in the 32207 property. I'm considering doing a HELOC right now to get some cash out. Nobody has lived in the property since we bought it in July, so I'm hoping seasoning is required as it is in a cash-out refi.

Is there any problem with me doing a HELOC now if I'm hoping to close by Feb? Do I have to pay back the HELOC before closing or can I use the sale of the 32207 property to pay off the HELOC on the same property?

Thanks!

I'm hoping seasoning isn't required*

Don't bother with a HELOC if you're going to be listing the property for sale in a few weeks. It's not likely a bank is even going to be able to open the line in that time. The last two HELOCs I did (with two different banks) took 1.5 to 3 months from the initial application to the line being opened. Plus, some banks have an early close penalty if you close the HELOC in, for example, the first three years.

@Thea Linkfield I agree with @Kyle J. , don't bother. You really only have 1 shot with HELOC companies, wait for a new location. They run your credit and you find out about them, you dont want someone wasting your time, so don't waste theirs.

Wait and find something else, there is ALWAYS something else. Any HELOC will be a 2nd on the property, so if you go and buy, fix and flip, you will need to pay back the HELOC. Why not just buy, Fix and flip with a company to do it all in one? I would only do a HELOC on a property you plan to own for a while.

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