Need advice HELOC / HELOAN or don't do either?

[Sam Kovatovich]

Hello! Newbie here, wife and I would love to purchase our first rental.  We thought it would be best to see what we'd qualify for first, and we've gone pretty far down that path and have submitted all the paperwork for a HELOAN and now we're getting cold feet.  We had planned on taking $100K equity out of our primary to purchase the rental, went with a HELOAN.   Knowing that it's a HELOAN we'd have to start paying on the loan immediately and we haven't identified a property yet.   Is $100K enough to get started in rental properties today, and is a HELOAN a recommended pathway to getting the first property?  

[Bryce Jamison]

I'm very conservative when it comes to personal finance, so I'd prefer to save money up to start investing instead of using equity out of my primary residence. Yes this may take longer, maybe much longer, but you won't have the additional loan payment and it will give you more time to learn more about REI and to go to meetups to meet other like minded individuals and build the team of contractors, lenders, real estate agents, and lawyers you'll need.

You can also look into ways to increase your W-2 income to speed up this process. This is something I don't think many people consider. You'll get a much higher ROI getting a 10K annual raise at work than you would putting 50k into a deal that cash flows $300 a month for example.