If you can swing it @John McGrath, it is a very viable way to get rolling. Like @Gerald Pitts says, let the profits pay down that HELOC fast and leverage it again for the next.

I am doing it now on a Pigeon Forge property. I don't want to do it forever, but it's a way to get in the game, and let the cashflow pay down the heloc asap.

There's nothing wrong with using a HELOC as long as you're smart about it. Don't over-extend yourself to make the deal work. It's similar to a credit card; you can earn some great benefits if you are smart about it...or you can drive yourself to financial ruin if you are not.

I would say absolutely. That is what I did.

What's the worst that can happen? You end up filing for bankruptcy and lose the STR. But don't let that discourage you. What's the best that can happen? You do so well that you get a 2nd STR, then a 3rd and additional ones. Then you are making more money on your STRs than you do your full time job. So you quit your full time job just to run 2 dozen STRs. I know of this guy and his wife doing this exact same thing in a refinery town.

I’ve done this. Worked great for me. But I did get a bit lucky on that one.

Updated over 6 years ago on 09/28/2019. Most recent reply

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John McGrathPoster

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Home Equity for STR?

John McGrathPoster

Posted September 26, 2019 11:28

Hi Again, Would it be advisable to use HELOC for down payment/updates on a STR (from my primary)? We have some savings but not sure I'd want to use big bulk on a down payment. On other hand I get nervous using my primary for anything. Considering NC mountains (i.e. Boone area) or the Smokys. Thanks anyone for any advice :) John

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