Pulling a HELOC for 20% down on a Midterm rental

[Ben Trumbull]

Hello everyone!

I'm extremely new to the world of real estate investing. My question is pretty simple. My personal home has around $114,000 in equity. I would like to purchase a newly built tiny home that is fully furnished and turnkey for around $175,000, with a 30% down payment with a conventional loan. My strategy would be to pull a HELOC on my current equity to pay for the down payment on this new property, which would be around $35,000. I would then rent out the property as a midterm furnished rental at $2,000 a month because it's right near our two biggest healthcare centers in the area.

My question is basically this: Beyond the information that I have provided, where should I go from there? How would you structure my next moves to pay off my HELOC and move forward into investing more?

Some numbers that I put together on this property if you are interested:

• With a purchase (asking) price of $183,000 and 20% down ($36,600), I would ask around $2,000 a month.
• With all utilities being really low since it's a tiny house, I'm looking at a monthly cash flow of $494.65 and a COC ROI of 16.22%.

Thanks!

I hope this is helpful!