Updated over 2 years ago on . Most recent reply
Using multiple HELOC's to buy real estate. Help!
Hey Everybody. My name is Luke and I'm starting to get my feet wet in the real estate market here in Charleston, SC. I currently have 3 properties (2 of which are rentals). I took a HELOC out on my current primary residence to purchase my last property. I guess my question is...Can I continue to use HELOC's to purchase more investment properties? Basically I would just get a line of credit on my most recent purchase because that's where the equity currently is. I would just be using the same equity over and over again. Seems a little to good to be true. Help please.
Most Popular Reply
Joe Villeneuve
#5 All Forums Contributor
Pro Member
#5 All Forums Contributor
- Plymouth, MI
You're not using the same equity over and over again if the source is a different property each time. Also, you're not really using equity since what you are thinking is equity is actually debt from the previous property. If you do this, don't forget to subtract the monthly payments from each HELOC from the cash flow on the property it was used on,...not came from, but used on. This is because the first one set the precedent when the source was your own home but you used it on the next property.