First time out of state Investor

[Isidro Rodriguez Jr]

Hello, I'm new here. I'm at a point in my life where I think I want to get into rental properties. I own a home in Southern California and have a HELOC. I've been looking at properties in Cleveland, Ohio and Memphis, TN. At the prices I'm looking at, I know the property will need some rehab. I'm thinking about the type of loan that will put the purchase and rehab together. My down payment will come from my heloc. Also the fact that I don't know the area is making it difficult. How do you guys decide when a property is good enough to invest in and keep as a long term rental?

[Travis Timmons]

I'll be the first person to post that has nothing to sell. This is a bad idea. A HELOC is a great short term debt instrument to get in and out of a deal within 12-24 months via sale or refi. It's a really bad tool for a down payment. It's an even worse tool for a down payment on a stagnant rust/sun belt city that you do not know at all. You'll also be relying on the advice of locals with a profit motive.

Don't borrow against your house to do this. It's too risky on account of you being new and not knowing what you don't know. And index funds historically perform better than low appreciation real estate markets with none of the hassle factor. 

I've done live-in flips, short term, mid term, and long term rentals. I'd be happy to help and (will say it again) have absolutely nothing to sell. Feel free to send me a direct message if you want to talk in more detail.