Using HELOC to buy next property
I am looking for advice.
Last December I bought a second home looking for more space for my family. I was able to rent our previous home for $2050/month and It leaves me with $650 after all expenses. Because I just recently bought my second home (December) and have been working on home projects on the new house, I am currently low on cash (~$5000). However, I do have available a 50K HELOC on my first property. I am planning on using the HELOC to buy another investment property and I already have a property in mind. However, my wife is kind of nervous about using our HELOC since we are a little bit short on cash and we have plenty of other projects we still need to get done at home.
However, interest rates are low and I am looking to buy a property for about $100K that I can renovate and rent right away. My question is, how do you know that you are ready to buy the next property? What's the level of margin that you use per property in case of emergencies. I am planning to pay off my HELOC slowly with the cash flow of my first property and the new property but it will take me a while to pay that off. Thank you so much!