HELOC for second home? Seeking advice

[Alex Gauthier]

Hi Everyone, 

I am new to the BP community, but from what I have seen this is a great resource for real estate advice, community, and education. I am seeking advice regarding purchasing my first investment home. I am not asking for a mentor, so I hope this post doesn't violate community guidelines.

My wife and I own one home, that was appraised in January at $275,000. We owe $193,000 on it now. Together we earn $105,000/yr gross, and have $40,000 saved. No debt besides the mortgage. What I am considering is applying for a HELOC, so that I would have enough to put 20% down on a multifamily, if I combine it with most of my savings. Assuming I can get ~$50,000 from the HELOC, I believe I would have enough for 20% on $350,000 home and then have enough left over so that I am not strapped too thin. My thought is that this multifamily would need to cash flow after both the mortgage and HELOC payment every month in order for it to be a potential investment.

I would love to know what the community thinks, or any advice/resources you have to offer. 

Thanks,

Alex