I have ZERO money to put down on an investment property, but have around 40K in equity in our home. What would be the BEST route to use a HELOC to purchase an investment property strictly for as a rental (do not want to flip)? Thank you for any suggestions on helping us to attain our financial freedom!
Anyone have a suggestion? Thinking about how to minimize risk on current residence, while maximizing its appreciation to purchase a rental property... Thanks for any insight!
I'm a newbie but if you have equity and the deal makes sense that you could get into a rental and potentially pay down your HELOC , that sounds like a win.
@Jeremiah Carson , I'm a newb still. However, I took out a HELOC as a way to fund a purchase/remodel. I was able to secure 35% of the total equity ONLY. You may want to include this into your analysis. The HELOC terms differ from bank to bank, obviously, but I was under the impression that I would be able to secure 100% of my equity and I was wrong.
Not sure what your current situation is, but have you considered house hacking as another method to finance your new purchase or pay down your current house?
Every deal is different but I did just what you are describing about 10 years ago. I took out a HELOC on my principal residence and bought a 4 unit bldg. nearby. It worked out fine for me and the new place is cash positive.