Calculating Cash Flow Using Heloc as Down

[Erik Maddeaux]

Hi All,

My wife and I are would be investors from Barrie, ON. Our primary home is paid off fully and we have acquired a HELOC for [email protected]% to use as our down payments and any rehab budget for our future investment properties. We have been looking with a local investor friendly agent, if you know the market here you'll know you need some creativity to make things cash flow and need to add value for things on market. The market has slowed from the spring mayhem and buyers have a chance to think before offering.

Where I am struggling with my calculations is putting the interest only portion of the HELOC in our expenses. I've been told that this is wrong and will make it near impossible to cash flow. Here is a basic example, disregard the insurance as I was trying to zero out the cash flow portion.

My question for all you brilliant minds is, should I be considering this in my analysis?  This deal sucks, but gets better if that is removed, right or wrong in your opinion?