Lending question: HELOC vs REFI?

[Brooke Morton]

Hi all! I'm debating taking a HELOC out on my personal home, or doing a refi on an investment property. How to choose? Does it simply come down to which option gives me more cash at a more competitive lending rate? Or is there more that I need to consider?

(I did a refi on my primary back in 2020 and used that cash to buy my second STR, so I know the refi plan works well.)

[Evan Polaski]

@Brooke Morton, first you mention HELOC OR refi? Is there a reason the two are exclusive options?

As others mentioned: HELOC is great when there is a clear exit to pay it off. Flips are how I use my HELOC, primarily. I use refi's on my rentals because: a) they are owned in LLC and I have yet to find a HELOC lender. B) I tend to use that money for more long term investments, i.e. buy and hold rentals, even is BRRRR is a possibility.

Effectively, I try to tie my investment timelines to my loan products: HELOC is short term, so short term investments. Buy and holds are long term, so long term loans/mortgages.