Best HELOC approach

[Ammanuel S.]

Hey guys! New real estate investor here. I have an interesting scenario and would like to pick some of your brains!

So my parents have 2 homes, one of them is mortgage free and worth approximately $300k and the other is a rental which now has $220k worth of equity. I myself have $30k cash.

My parents are willing to loan me HELOC's on both of their homes to start investing heavily into real estate and won't charge me any interest. So assuming a bank loans me 80% of the equity, I would have around $400k or capital to start investing.

Is there any particular way you guys would suggest I begin? I'm looking to buy a few properties very quickly in the new year. Maybe get a duplex on my own with my cash, and then buy a triplex and/or a 4plex with the HELOC capital.

Any advice you guys have for me would be greatly appreciated!

[Allan Smith]

I would strongly advise against using a HELOC for any project where the HELOC would not be paid back off in a few months. Lines of credit are not for holding real estate, it's a bridge loan to yourself. Buy a property, flip it, sell it, pay off LOC. Or Fix it up and then refi, and pay off LOC.