Buying 1st Investment Property With HELOC

[James Austin Wiseman]

Hello everyone! This is my first post on BP. I have listened to 60+ BP podcast, and have been trying to get educated the best way I can. I am a realtor (doing it to learn more about the business) and I work with several investors. I have helped seal a number of good deals for my investors, but I want in the game as well. My father has a $300k home that is paid for, and he has quite a bit of cash reserves. He has agreed to get a HELOC that we can use to buy and hold properties. Once we have held them for 6 months we can get a mortgage on the property so that we can get the line of credit back open. We are looking at getting a $100k line of credit, because it is the most you can get without having to purchase lenders title insurance. My father will be a passive investor and we will split cash flow 50/50. We are about to put in an offer on a duplex which holds 1 bedroom units. Purchase price will be around $32k, estimated rehab is $20k. Both units will end up renting for $600/month each. At the end of the day, cash flow should be between $700-$600 per month. I would like to set it up the best way possible. Should we set up an LLC for it? Could the HELOC fund the LLC? Would I make both of us operating managers? Thoughts?

Thanks in advance!