Using HELOC to buy Rentals.

[Bryan Pham]

Hi BP,

I am trying to explore an idea about HELOCing my current home to buy rental properties. Has anyone on BP done this before and what are the inherent risk I should be aware of before processing with this creative financing strategy?   

[John Warren]

My first four unit was purchased using a HELOC to help fund the down payment. I wouldn't say there are any huge risks as long as you can afford the larger mortgage payment on your primary residence. You essentially get to borrow your equity for historically low interest rates, and then park that equity in a cash flowing asset. This worked out well for me!