HELOC loan to aquire more rental property’s

[Cameron Davisson]

Hi,

I was wondering if I can/should use a HELOC loan to aquire more rental properties? I just closed on my first rental property last month in Clarksville Tennessee. I know I would need at least 6 months for seasoning, but wondering if it would be smart to use a HELOC to aquire more property and increase my portfolio?

Thank you!

[Brian Lewis]

Hi Cameron, YOu can use HELOC's to acquire more rentals, but whether you should depends on how conservatively you use it.

But keep in mind that HELOCs on rental properties are harder to get than on a primary residence. fewer lenders, lower LTVs, higher rates, and stricter seasoning.

If you go this route, stress test for:
-Variable rates
-Strong cash flow coverage
-A clear exit plan (HELOCs work best as short-term/bridge capital)
-Portfolio-level risk

Used conservatively, HELOCs can help you scale. Used aggressively, they can create real risk.

Hope that helps!