HELOC Stuck on how to start

[Kenny Kuramoto]

Ok. I have a HELOC of $200k I'm having a hard time figuring out how to start and scale. There is only 2 ways I can think of to make it work. 1. Buy property outright and just pay the HELOC off slowly. 2. Is put a down payment using the HELOC then have two loans. One conventional and the HELOC. Lastly is Flip properties if I can find one to build funds. There is a duplexI want that has legacy tenants but I don't think I can make it work. Heres the numbers.

Purchase $135,000

Rent - $1700/ $850 per tenant(they have been there for 10 years)
Property Taxes:$ 142

Insurance:$ 28

Property Management:$ 156

Maintenance:$ 170

Capital Expenditures:$ 85

Operating Expenses = $581

$1700-$581 = $1,119

Option 1 Pay off all through HELOC = $1,119-$1100 = $19 Cash Flow :(

Option 2 $1119-$672(Conventional)-$281(HELOC) = Cash Flow of $166 Too low, but i still have around $165,000 in HELOC to buy another one.

I may have to find something that cash flows more. Thanks everyone for their time reading this. I just want to start my journey already!

[Benjamin Aaker]

HELOCs are a great way to have money ready to purchase a new property. They are more expensive than a conventional loan, so are best used for the down payment on a conventional - your second option. Seems to me that your insurance rate is low - your property will be non-owner-occupied so likely have a higher premium. I budget 5% for cap ex and 5% for maintenance. Unless this property is in need of a lot of work, your numbers for these seem high to me.
You should also evaluate why the cash flow you estimated is too low. This number is going to be different for different investors. But keep in mind that you'll be building equity and that's more important as long as you aren't in the red.