Using Home Equity to Start A Portfolio

[Jonathan Holland]

Hello everyone,

I'm looking to purchase my first investment property by the end of the year, and what I'm trying to work out is the financing. I have 70k of equity in my current home, and am unsure whether to tap into a HELOC in order to put a down payment on one or more properties.

The plan I've been thinking about is renting out my house while using the HELOC to purchase a fixer upper, and to live in it while preparing to either flip it or rent it out.

Are there any pitfalls to know of when using this method? Any questions that need to be asked?

Thanks,

Jonathan