If Using Heloc with BRRR (Not Refi)
- Does anyone know- if investment costs you - (example) cash $75K(COE, Deposits,Rehab,Carrying..) and after Rehab you HEloC back $60K
- How should you adjust your spread sheet-to reflect ROI ?
- Does this strategy affect IRR as well?
Any 1 with insight (for the math challenged) - most appreciated.
For HELOC i believe its ((ARV)-(Loan Payoff))*80% for the spreadsheet formula
ROI = (Current Value of Investment - Cost of Investment) / Cost of Investment
Heloc is more for short term financing. I would not use it for the refinance part. You can use it for the buy and rehab piece.
I did heloc, bought the next property and then paid off heloc when refinancing
It all equaled out in the end so not sure if I should’ve just started off with the refi, but the line of credit was nice because I didn’t know the exact amount I would need at the time
Either way it worked out best of luck !