Keeping/renting current home and buying new home with HELOC

[Jon Cline]

My current home is recently on the market in Los Angeles though it is a unique property that I'm considering renting instead. I would want to use a HELOC to help purchase another property we would move to.

1. I have a small 80k HELOC currently at a ~6% rate.
2. My primary loan on the current house is also a 7 year ARM which will increase at the end of 2019.
3. I have roughly $300k in equity in the current home.
4. The current home has a finished and permitted standalone 224 sqft office building in the back yard which is nice.
5. I would look for the bank to increase the HELOC into a majority of the equity.
6. A place I am targeting is almost 1 acre nearby and has several house hacking opportunities.

Has anyone done this and are there any considerations besides the potential rise in interest rate on the HELOC?