Any real estate investor will tell you that while their team is constantly on the lookout for the next deal, sometimes a golden opportunity falls right in the lap, completely unexpected. That’s what happens when an investor is in the market full time, some call it luck, good fortune or simply being in the right place at the right time.

Sometimes though a potential deal never gets off the ground because the investor’s funds are tied up in other projects or there are funds available but the costs of tusing a heloc to finance investment propertyhe funds is prohibitive for that particular opportunity.  So if having cheap money readily available to you is important, where can investors find such funds?

Maybe the investor is sitting on it. Or better said, living in it. The cheapest, most readily accessible source of borrowing is the equity in an owner’s own home in the form of a home equity line of credit, or HELOC. A HELOC, as a line of credit, is essentially a credit card the property owner can draw from.

A bank will appraise the property and issue a line of credit based upon available equity. Different banks have different guidelines but some banks offer lines of credit anywhere from 80 to 100 percent of the value of the home. Say the bank orders an appraisal and the owner’s home is worth $600,000 and the bank will issue a line of credit up to 90 percent of $600,000, or $540,000. The bank next subtracts any existing liens. In this example, there’s $400,000 home mortgage. The HELOC will then be $140,000. The terms for HELOCs are some of the least expensive borrowing available today.

Now the real estate investor has $140,000 available to use at any time. As an unexpected opportunity arises, the investor simply writes a check on the credit line for the amount needed, then replenishing the available credit once the investment is rehabilitated and sold. For those with equity in their home, a HELOC is an important, convenient tool for the investor.