Use HELOC, then refinance or go conventional?

4 Replies

Hello BP folks,

I currently have 4 mortgages (my home and 3 single family rentals). I’ve read on BP that many banks will allow me to go up to 10, depending on my finances, etc. I just talked to a lender and he tells me my finances are fine and that he could easily get me another loan, with 25% down. My strategy is simple buy and hold.

The three rentals I purchased in 2007 with my HELOC, and then I refinanced each one. A lot has changes since then. My question: Does it still make sense to purchase a property with my HELOC, and then refinance? Or have all the changes since 2007 made it better to just go straight to the lender to purchase the property?

Any thoughts would be much appreciated.



@Don Jackson You ask a great question. I think it would depend on a couple factors: 1) Does the properties you are considering buying need to be rehabbed? If so, then I think it is best to buy with private money or with your HELOC so that you can get the property's value as high as possible before putting it on permanent financing. 2) If no rehab needed then I would get it locked in at a great rate for however long you are comfortable. I personally like 20 years because they will be paid off when I'm looking to retire.

That's one way to look at it. 

Thanks Aaron. I didn't consider the fact that the property will need to be rehabbed and it will appraise for less when I first buy it. After I buy , then rehab, it should appraise for more so I can get more from the refi.

As mentioned, the private money strategy makes the most sense if there is rehab to do.  Send me an email with details.

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