HELOC - Should I Get One for my First Buy n Hold Property??

[Nick Portillo]

Good morning from the West Coast,

What are the pro's and con's of obtaining a HELOC for your first investment property? My goal is to put a down payment on my first property in about 2-3 months and need a little guidance on how to afford the down payment without relying on my income and saved up cash.

Any advice on how you fund your down payments?

[Kevin Siedlecki]

@Nick Portillo - if you can afford to do it, then go ahead. Getting a HELOC completely changed the way I run my business, for the better in a lot of ways. I would say if you have cash available, open the HELOC so you can dip into it as a cushion, but use the cash for the acquisition so you're not 100% leveraged.

The only cons are 1) obviously that you're going to pay interest on the money, and 2) the bank will count the interest on the HELOC limit against your DTI when you're looking to get a loan, even if you don't have it drawn.

So if you can meet DTI requirements with the HELOC factored in, I say do it!