Can I cash out refi on multiple properties to payoff HELOC?

3 Replies

I am new to real estate investing and currently have 2 sfh. Also I plan on discussing this process with my bank, but I am looking for input from others who are more experienced...

My husband and I are currently purchasing ($40-50ish,000) Home’s) for buy and hold in our area. We currently are using a heloc to buy the properties cash. Our plan is to purchase/rehab as many properties as we can using our heloc then would like to cash out refi on each home as one loan. Then after paying off the heloc, use the available cash from the to purchase more and repeat the process. My question..

1.) Can I cash out refi on multiple properties as one loan?

2.) Would you recommend this strategy? Why/why not?

I should also add we do not do this full time, but are looking to create enough passive income with the hopes of retiring early. We are not big on having large amounts of debt and plan on using the cash flow to payoff the principals as quickly as possible when refinancing.

Thank you for your input!

@Brittney K. , as I understand it, yes you can, and it is a good strategy for accumulating properties (assuming you buy them right).  There is a "delayed-financing exemption," that allows you to cash-out refinance a home you purchased with cash.  I think there might be a 6-month window within which you must refinance. Note, I am not a CPA or other financial advisor.  I am thinking of doing the same thing.

@Brittney K. , also, for your situation (not wanting large amounts of debt and wanting to retire early), you can reinvest all profits into each property and pay each property off in a bout 8 years.  Assuming you own 8 properties, you could then cash-out refinance one property per year and live off the proceeds (tax free since it is a loan).  Then, let the tenants pay it off in another 8 years or so.