Updated 9 months ago on . Most recent reply
HELOC on a Rental Property - Pros & Cons
I am considering a HELOC on one of my rental properties which has a lot of equity (~350k) and a low mortgage rate. I would use the line to purchase more rental properties and BRRRR them to repay the line. Does anyone have experience doing this in today's market? Pros and cons? Lender recommendations? Or any other options you prefer such as a 1031 exchange?
Property is located in Massachusetts. Thanks in advance!
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I think that is a great strategy if you are using the money for short term projects like a flip or a BRRRR. Just be sure the calculate in the interest you are paying on that HELOC into the new project.
As for banks, my experience has been that many banks do not like to do HELOCs on rentals unless you have a decent portfolio which they then look at as a business instead of a single rental property. But maybe with that much equity they will be willing to work with you.