If you're using HELOC funds for a down payment on a new property, underwriters might require you to qualify based on payments for BOTH the new mortgage AND the full HELOC payment, even if you plan to pay off the HELOC soonIn my opinion, neither of these concerns are things that will not be sorted out by the title company and/or the loan originator.Greg, If you read Tony's question he was asking for "Anything" that may not be common to a new investor that could arise or be a pitfall.

Building relationships with experienced investors or property managers early can save time and help you avoid common pitfalls.

Hi Sam, I’ve found outsourcing common area cleaning with routine inspections works best.

Structuring under an LLC is common, too.

Pitfalls to Avoid • Underestimating repairs (huge rookie mistake). • Overpaying because you “want” a deal — be disciplined. • Not having multiple exit strategies (e.g., can you rent it if you can’t sell right away?). 

Then there are those that watch a dozen YouTube videos and are ready to become instant real estate moguls.Both find the pitfalls and unfortunately many are expensive ones that turn people off from the start.Understanding the market you will be investing in is key and many are doing remote flips in areas they have never set foot in. 

If you (or anyone else reading) are still considering this asset class, I’m happy to share what a solid setup looks like and how to avoid some common pitfalls. 

Are there any pitfalls, landmines, or possible penalties that we need to be aware of before using the HELOC? 

Therefore, pay your bills, keep up with licenses and permits so you are operating your business legally, avoid acting negligently, premises liability pitfalls, and associate with vendors who are licensed, insured and list yourself/deed holder entity as additional insured.

Over the years, I’ve seen investors run into the same problems when it comes to financing:

Rushing into deals without clear exit strategies

Underestimating holding costs

Not comparing multiple funding o...