Buying with HELOC as down payment

[Ryan Horan]

My name is Ryan Horan and this is my first (of likely many) posts to this forum. My plan is to purchase my 1st rental property in the Indianapolis area before the end of the year. The consensus seems to be that a 20% down payment is necessary since I already have a primary mortgage. We had an addition put on this past year and, as a result, have a HELOC with potential funds for a down payment. It's set at the prime rate but is variable. I'm thinking of paying half the down payment out of pocket, half with the HELOC. Obviously that secures my house to the loan, but it would basically keep me from draining my savings account to throw in a 20% down payment. Thoughts? I'm not sure if this is a typical strategy, but it makes sense to me. I would probably throw the property's cash flow into paying the HELOC off quickly because it will be at the higher rate and I don't need the cash flow at this time. Any advice is greatly appreciated.