Finance a house flip with 100% HELOC

[Chris Barry]

Hi there,

I would like to know if is advisable to buy a home to fix and flip and close on it with 100% of the payment coming from my HELOC. My home is free and clear and I have a $250,000 HELOC. I would like to buy, say, a $150,000 home, renovate it and flip it within 6 to 8 months. I don't know that I can get any other type of loan right now given my circumstances. That is why i would like to use my line of credit to make the purchase.

Any comments or suggestions would be greatly appreciated.

Thanks,
Chris

[Josh Green]

i say go with the heloc. your minimum payment on the heloc for 150k is about $337 a month. talk about cheap money! most car payments are more than this.

you can swing that payment no problem (even if you just took an extra 5k out and threw it in an account for a year to take payments from).

if it were me though, instead of doing one $150k house, i'd probably do two $75k houses or 3 $50k. diversify a bit.