So, I scoured the forms, and I couldn't find anything on this. I would appreciate any thoughts you guys could share. My thesis is: for certain individuals interested in buy and hold, it could make more financial sense to use a HELOC for a greater part of your financing strategy, due to tax consequences. So, I'm under contract on an investment property (my 2nd!) and we are heading towards closing. I plan to have a 30-year mortgage for 75% of the value, and then I'm considering using a HELOC from my primary residence as the downpayment (or I might use cash). I have a traditional full time job with a W-2. Due to my adjusted gross income, I am not allowed to deduct my passive activity losses against that income, and I am not otherwise a "real estate professional." So, if my passive activity losses are greater than my passive income (and they will be due to depreciation), I have to carryover any and all loss until I dispose of the property, which could be a very long time since I plan to buy and hold. But, here's the interesting thing -- for the HELOC on my primary residence used to help purchase the property -- the interest paid on the HELOC IS deductible against W-2 income, even if used that on for an investment property, and regardless of passive activity loss rules. So, putting aside the variable nature of the HELOC interest vs. a mortgage, wouldn't it make sense to stretch the HELOC to as far as you comfortably could so that you create a situation such that the Interest is deductible against your W-2 income? I understand this situation would apply only to people who can't deduct passive activity losses against their regular income, but I have to imagine that's a very large group on Bigger Pockets. And also, I'll disclaim for you -- I understand any and all responses are not advice, and you recommend I seek a tax professional.