suggestions on Financing STR

[Brian Bubel]

need advise. 

i have take out a HELOC on my primary home. the intent is to use this money for down payment on a STR. I am wondering if this is a good way to get my foot in the door for STR rentals. I know there are better ways but would this way work?

[Collin Hays]

Quote from @Andrew Steffens:

Yes, you can. Should you? It depends. Can you sustain bad months or a downturn in the STR market? If no, you can end up losing not only your investment property but also your personal house.

We have a client that is facing this situation. Took out a big HE loan for a downpayment on a $900K cabin in 2021.  Been losing money most months since, and it's worth probably $700K at best.  

The old adage applies here..."You don't know who's got their swim trunks on until the tide goes out."

Those are financial mistakes that you just cannot afford to make, unless you are very wealthy in the first place.  Then again, if you were that wealthy, you wouldn't be trying to get to your personal home's equity.