HELOV vs. Home Equity Loan

[Jaron Chaplin]

When considering the acquisition of a second property by leveraging the equity in an existing property, which option would be more advantageous, obtaining a Home Equity Line of Credit (HELOC) or a traditional home equity loan?

[Samuel Eddinger]

I always do a HELOC over home equity loan. The benefit is that you can continue to turn the money over again and again and again. I would buy a property in cash using HELOC, renovate it and then cash out refinance (getting all the money back) and pay down the HELOC to zero and then rinse and repeat. In this way I didn't need hard money or anything else.

I currently have just a HELOC on my primary residence and I used that to purchase 3 flips that my partner and I have finished up. He paid me hard money for the use of my HELOC.

Finally if you have a good W2 or other income source coming in, you pay it down which gives you the dry powder to be nimble to act quickly to buy again.  Happy to discuss this further.  If desired, DM me.