HELOC to purchase second investment

[Elizabeth O.]

I bought my first property with a conventional loan.  I no longer have a lump sum sitting around to put down 20% on a second investment property.  I am looking into a home equity line of credit.   I have read great things about it being a way to get an investment property with almost no out of pocket costs as the interest is tax deductible up to 100k.  

Most things that sound to good to be true usually are.  

Main concern is the obvious; leveraging my primary residence.  

I was able to accomplish cash-flow with my first investment. If I do my due diligence and make sure I can cover my mortgage and then the PandI on my HELOC what else do I need to be aware of?

Will this hurt my credit?

Is this truly a way to get ahead if you are cautious on your investment and don't just have big piles of cash lying around?

Thank you very much for reading this and I look forward to reading any and all responses. 

[Larry Turowski]

@Elizabeth O. I use a HELOC, as do many investors. Debt isn't bad if you use it wisely and use it to make money for you. It is bad if you use it to go on vacation.

The main things to consider are your interest rate, the term, and your comfort level. Interest rates on HELOCs are usually great. The term is usually for 10 years. Plan on paying your HELOC off within that time frame because you don't what will happen in 10 years. Probably you'll be able to get a new one. But maybe you won't. Maybe banks won't be offering them, etc. And then your comfort level of leveraging your own home is up to you. I use my HELOC for flips but not for buy-and-holds, because I am more comfortable knowing I have not made a long term commitment with that money. My HELOC expires in four years.