Getting crushed by HELOC interest

[Nick Causa]

Quick background: We purchased a multi family that was to be a live in flip and to fund the purchase and the reno we leveraged our primary residence at the time. We moved into the live in flip and once the flip was over we refi’d hoping to recoup everything. We didnt do a cashout refi because the rate on the mortgage wouldve been too high, so we took out another HELOC. Since we did not recoup the costs to pay back the first HELOC, we now have two maxed out HELOCS. Long story short, the reno cost way more that anticipated. Whats done is done and we learned a lot during the process but now we’re gettting hammered with those HELOCS because the interest rates are skyrocketing. One is at 7.5% and the other at 9.3%. I’m considering taking out a 401k loan to knock down the amount of one of the helocs (9.3% because its highest and also interest only). This way, the interest payments will go to us, we can pay back the heloc faster, and 9.3% is not a gain im seeing in the market anytime soon. I know theres no way to time the market but things are looking bleak in the future so i feel any unrealized gains we would be missing wouldnt be so bad. The real problem is paying a pre tax value back with post tax dollars. Anyone have any suggestions?

[V.G Jason]

A loan to payoff another loan. You need to get out of the property. Hopefully, people read this and stop playing the super leveraged game.