HELOC to purchase a rental quad?

[Jeff G.]

Have been perusing this site, and might eventually find answers / opinions on this, but I antsy!

My ~$150K home is paid off, and I'm considering taking out a HELOC on it in order to make the 25% down payment on a $200K rental quad.

I've created a spreadsheet to analyze what I think are all the numbers, but would just like general opinions as to whether this is nuts or not.

Monthly rents in the quad are about $650 each. HELOC rate about 5%. Mortgage rate on the quad about 4.5%. I wouldn't add any add'l cash down on the quad.

Thank you!