Using Equity to Reinvest

[Tony Thompson]

Had a few thoughts about using equity to reinvest.

1) Is it a good idea to reinvest equity from one property to purchase another? Generally I see this as getting your money (equity) to work harder.

2) Is there a limit as to how many times I can pull out equity of a property to reinvest?

Thanks

[Mike V.]

I have used my HELOC on my personal residence for down payment and rehab cost on several investment properties and then refinanced them after a year (seasoning requirement). Yes there is risk there but if you buy at a big enough discount that risk is minimized. When you do refinance be prepared to pay more in points and/or rates since the banks will penalize you for a cash out refinance. For me this is still the cheaper way of doing it.
Also, I have looked high and low for anyone that will do a HELOC on investment property and so far no luck.