HELOC REFI or no?

Question

Hey BP community.

We are currently on our 2nd buy and hold property (thx to @Brandon Turner, @Joshua Dorkin for the podcasts I listen to daily and the motivation to take action).

We currently own a duplex purchased using a HELOC for the 20% down,closing costs ($20,200)  and a private money lender for the remaining 60k @ 12%.    I"m currently in the process of the BRRR method and looking to refinance shortly.    2 questions:

1.  How long do you have to wait before you can refinance with a bank? 1 year?

2.  I have an option to switch my variable 2.24% interest HELOC rate to a FIXED rate of 3.44% (10 year) or 3.74% (15 yr).   I currently only pay 100$/month to this and save the rest of the cash flow for vacancy, cap ex, etc.

**   I'm hoping the refinance has the equity to do a cash out refi but I'm looking to settle the variable rate currently in the meantime.....

Brett Weaver · Answer

Bill,

Judging from my conversations with lenders, there is no hard and fast rule for the "seasoning period" for refinance.  I heard an investor on one of the many podcasts I listen to (can't remember which one) said that he went from bank to bank until he found one that would refi shortly (either immediately or within a couple of months).  My lender requires six months.

If there's a window of time that is closing on the option to switch to fixed interest, I think I would switch it.  Otherwise ride the 2.24% as long as you can. My $.02