Actually the interest on an equity line would be a LOT lower then a loan to purchase a major fixer. If it's owner occupied you could get a FHA 203k renovation loan. But it sounds like an investor flip. In that case you would have to get a private money loan. They generally lend up to 65% of the property value with very high rates and points. It would be a LOT cheaper to use your heloc (lower rate, no points). But then you are also further encumbering your primary residence (if the heloc is on your primary).

There are rehab loans available, as well as investor loans from banks that are investor-friendly, who cater to people who want to flip houses, rent them out, etc. If you have equity in your home and can pool enough together with all of the investors, it might make sense to use that for the purchase instead. However, the interest rate on the equity loans will be higher so you'll have to add that into your ROI calculations. You're also going to have to consider how long it will take you from closing on the purchase, to closing on the sale, because of the difference in interest.

If you need any help finding financing, feel free to contact me. I work with investors and I lived in Morris County so I'm familiar with the area (especially Mendham, an upscale community... gotta love that restaurant they built from a horse barn, forget what it's called, but great food haha)

Kellen Gracey
Mortgage Specialist
BayBurg Financial
Office: (954)764-7064 (ext 211)
Toll Free: (866)230-9050 (ext 211)
Cell: (386)237-7231