Heloc, brrr rehab costs, waiting period for refi?

4 Replies

Hello guys quick question, if i use a Heloc to finance the BRRR strategy, is it true some helocs do NOT allow you to use the funds for rehab or closings costs, and if they do allow it, is there a waiting period for refinancing out of the loan to move onto the next one? like 6-8 months? i thought a heloc was treated just like cash, i keep reading mixed replies on the forums, im confused =(

thanks so much all!

@Oscar Chirinos a HELOC acts just like your checking account. You literally get a check which you can deposit into an account or use to make a purchase. I recently used my HELOC to purchase a six unit deal in Cicero, IL, and it was as easy as having cash in the bank. I am not sure who told you that you can't use them for rehabs or closings??

@Oscar Chirinos . I just want to keep tabs on this discussion because I want to know about a 6-8 month waiting period to refinance. I have purchased a property in June and have to do work but then want to cash out refinance to recoup my rehab costs and pay the original loan off so I can have it all under one, but the same as you, I have heard many differing answers such as I need to own for 6 months before I can refinance or such. 

Promotion
NestEgg
Smarter rental management
Outperform your peers by 71%
NestEgg landlords save $6,960/yr in fees & 20 hrs/mo*. Self-manage for free or go hands-off for $29.
Start now, get $500

the 6 (or 12) month refi period is decided by the bank/credit union that issues the loan. Your next bit of homework is to research lenders, find out their requirements, rates and fees and pick one to work with.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you