How much equity should I leverage?

[Aja Leafe-Hall]

Hi,

I am getting ready to buy my first long distance investment property with funds drawn from a HELOC on my first home. I am considering using about a third or less of the equity available, and holding on to my home for a long term investment even when we move out of it. It has a locked in low payment in an area of swiftly climbing rents.

My question is should I use my HELOC to invest in a cash flowing 3 unit property, or start small and work my way up to that someday? I am concerned about being "over leveraged" even though the lender I am working with says I could do this Multi Family property. My experienced investor boss/friend says go Multi Family whenever I can. The idea of doing this when I have very little cash saved up, scares me though. Is it worth stretching that equity?

Also, worth mentioning, The 3 unit building is in an area where my parents live, and I would like to move there in 2 years. So the idea of house hacking when we move is appealing. We would have some more freedom to find the right jobs.