My investment plan. Need someone to review it
I am in Seattle area. Here's what I have. 500k in cash, a paid off single family rental property that I plan to take out a HELOC of , est 700k limit. I plan to use the cash I have for down payments to buy multifamily units. Meanwhile using the money from heloc as my short term loan. Making sure I buy properties at ~75% of the ARV. After repairs and putting tenants in, I'll refinance and hopefully paid off my HELOC and then do it all over again. Can anyone tell me if this is a good idea, or areas for improvements
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I'm new to all this so if this is a dumb question, please forgive me: what's the advantage of HELOC over a cash out refinance? I found that cash out refi's have a much better rate.