Heloc on primary home

[Kyle Moreau]

hello,

what are the pros and cons of using a heloc on your primary home to purchase your first rental investment. Wondering if it's a good strategy. Or a horrible decision. 

[Chris Seveney]

Quote from @Kyle Moreau:

hello,

what are the pros and cons of using a heloc on your primary home to purchase your first rental investment. Wondering if it's a good strategy. Or a horrible decision. 

 Today its a horrible decision because you are essentially 100% financing the asset which will not provide you positive cash flow.  When heloc rates were 3-5% and you could cash flow on a deal, while still risky it was not as risky. Today 100% financing, high interest and potential for values to go down = recipe for disaster.