HELOC for rentals percentage used?

Question

Was wondering of anyone who uses HELOCS to purchase rentals what percentage of your own cash do you use in the purchase? IF your planning to later refinance do you put up 100% of purchase price in HELOC or a lower percentage?

Brandon Turner · Answer

Just mainly using it just for the ability to move quickly and make cash offers, leaning towards 60% HELOC/40% cash, then refinance just wanted to see what some others were doing.  I see what your saying Grant I typically have been trying to run my numbers off a 20% down payment scenario.

Grant Rothenburger · Answer

@Brandon Turner You can do it anyway that works best for you. If paying for a property with 100% HELOC money is what makes sense for you, do it. If you can get another loan and just use the HELOC for down payment, and that makes more sense for you, do that.

It's a tough question to answer because you can really do it anyway you want. If you want to use your own cash for 50% of it you can do that. If you'd rather 100% HELOC and then refinance, you can do that too. The only caution I have is don't buy a property and put a ton of cash down just to make it cash flow. Some people will look at a property that wouldn't cash flow at 70% financed (or 80%, 90%, whatever) and think "I'll just put more cash down up front so that it cash flows". If you have to do that, it's not really a deal.

Brandon Turner · Answer

Anybody?