Needing some help to how to use HELOC several times

5 Replies

Hey everyone. 

I'm new to the RE investment , and new to the biggerpockets website at the Same time .

I need some help guys to understand how it is possible to use the HELOC several times.

I've got a relatively good grasp on how to use it the first time , based on the equity of your primary residence. 

But how do you proceed to do it again and again.

Do you tap into the home equity of your primary residence again ? , or you should proceed differently?

If you guys can give me a concrete example through running a couple of numbers that would be great ( I manage to understand only through numbers 😅).

Thank you in advance. 


lets say you have a HELOC of 100k. you take 75k out and use that to BRRRR a property, with an ARV of 135K. after you complete the project and refi at 135k minus appx 25% you get 101k back at closing. you take that 101k and pay back the 75k you owe on the HELOC.

You now have your full 100k HELOC available to you again.

A bank will give you a % of the equity in a property.  They will issue you checks against that equity or just provide an account to transfer funds from.  You will incur interest charges on the money that you physically utilize from the account.  Your monthly payment will be interest only.  Once the principal is placed back into the line, you no longer pay interest on that money.  Typically, a heloc has a 10 year term. 

Yup.  I use mine for down and rehab $, I have used it once, and now am going to do it again.  I am going to close in 2 weeks, and then enlarge the heloc.  hopefully.

Just tell the bank you are going to do some work on YOUR home, while you shop for another.  they dont need to know you arent going to end up selling.  MANY people do this.  It has been a great system for me.