Houston, TX · Member since 2016 · 8 posts · 1 vote
Hi all,
I am looking to invest in buy and hold in the Houston, TX area. I have about 50k to invest and was wondering if I should refi my primary residence and cash out about 60k to increase my investment capital. I should add that I don't have a property lined up yet, but worry that rates might go up soon, increasing cost of money in the near future.
I think using you should consider a HELOC on your house rather than a refi.
To me it is less risky than a refi cuz your payment will be permanently higher if you refi now. If you pull a Heloc and use the BRRRRR strategy you can repay the Heloc every 6 moths to a year. If rates climb to high where you don't feel like you want to barrow anymore then just stop borrowing.
The other nice thing about the HELOC is that if you don't find a deal right away, you don't pay for the money... The HELOC that we use has NO annual fee, 3.25 rate, and a low payment during the 10 draw period.
Be careful with debt. It is a tool that has massive cutting potential. That is a good thing, assuming its not your arm that gets cut off.
Accountant · Houston, TX · Member since 2015 · 87 posts · 33 votes
10y
@Eli Mint Since you do not currently have properties lined up, I would suggest exploring your options with both a refi and a HELOC. The BEST thing you can do is contact a few lenders and find out their terms, requirements, etc. as far as a potential refinance or HELOC go. Local banks and credit unions tend to be more flexible with their lending options, so that would be a good place to start.
Then, based on YOUR risk tolerance, decide which option will be best for you and your goals. Find out your options first, and then go with the option that works best for your personal goals.