Using HELOC?
I am looking to buy 3 cash flow positive properties over the course of the next 2-3 years for retirement.
I own a house that has a good bit of equity, so I wanted to try to use that to get these properties, but need some advice.
I think it might be best to use "Other People's Money" to do this. My plan is to probably:
Find a a good deal on a CASH FLOW POSITIVE investment property and put down 25% I have already secured from a Home Equity Loan on my primary residence.
If it is advantageous and I can get a better deal paying cash, pay the rest (and any improvements necessary) with money from a HELOC I have already secured on my primary residence. If not, slap a mortgage on it right away.
If I use the HELOC money, I will wait 6 months while paying interest only on the HELOC
After 6 months I will refi the property and pay off the HELOC.
Then repeat!
Is this a pretty common method? Any holes in this plan? What problems might I encounter getting the refi secured after the 6 months to pay off the HELOC?
Any better ways you can think of that might work better?