Need Advice - HELOC to fund first rental?

[Andres Reales]

Hi everyone,

We own our personal home and finished making mortgage payments a couple of years ago. We are trying to get started in investing in real estate. We understand we could finance our first rental property using a HELOC of $90k on our personal home. However, we are not sure if that's the smartest way we could make use of that line of credit.

Let's say for example, we want to use the BRRR strategy (probably not the best way to start for new real estate investor), so we find a property worth 100k, and pay 70k to 75k for the property including repairs. Is it smart to pay for all of this using the HELOC and then refinance so we can have full access to the HELOC again? Should we instead pay the down payment and repairs with the HELOC and fund the property using hard money to then refinance it with a bank?

Instead of using the BRRR strategy, should we just finance 20% of down payment on a property and have a mortgage with a bank? This looks like the simplest path to start out our real estate investments. However, we understand that when financing properties using a bank, it could take at least 30 days to close, which usually is too long to close on an investment property.

Another option we have thought is to fund several rentals using the HELOC to make the down payment on each? However, we are not sure if that's a good way to start investing since we have never owned investment properties.

In what other ways could the HELOC be used to fund investments? Could you describe each? What are the advantages/disadvantages of each path? Which route would you recommend taking in order for us to get started?