Financing with Home Equity

[David Kuder]

I have around $215K in equity in my primary residence, which is currently assessed at around $340K. I was considering a HELOC or a standard Home Equity Loan as a means to pay for a down payment on my first rental property. My thought process is that even with a $50K down payment on a rental property ($250K price limit), my level of risk would still be low ($175K) on my primary residence. I would love to know if anyone in the BP community could provide feedback on

#1. whether or not this is a smart way to start in rental property investing? or

#2. whether to go for a HELOC or refinance and pull equity out of the home?

Thank you in advance!