100K HELOC - First Property Advice

[Colton Pierce]

Hi! I am looking for some advice on how I can maximize my $100,000 HELOC with Real Estate Investing.

Here are some of the specifics of my situation:

Currently residing and working in Salt Lake/ Utah County. Which I would like to stay in or around this area as it’s close to family and my employment.

Current mortgage on Primary (nothing drawn on HELOC): $1,400

2.99% initial Rate on the HELOC with no Initial Draw amount. 15 year draw period with a 25 year repay.

My dilemma is I would like to get into a home with the low down payment options to live in for a year and then repeat the process. This would also allow me to obtain more rentals in the next few years using the same amount of cash versus putting 20% down for a Investment property. However, in the SLC market it is nearly impossible to meet the 1% rule/find a cash flowing rental to pay back whatever I end up taking from the HELOC as a down payment/Closing Costs. So essentially I am stuck either investing out of the state (20% down) OR gambling with rent increasing (possibly negative cash flow for a bit).

Since this is my first property, I need to make sure that I am making the right move to snowball my investing. Any sage advice is great and a plus if it’s in SLC or a market where you are currently invested. 

Thanks in advance!

[Becca Summers]

The 1% rule in Utah doesn't work, however you can still get properties that cash flow and get great appreciation. Would you be against turning your current home into a rental property and moving into another one? The trick with the Utah properties is to make sure you are purchasing under the average purchase price in an area where rent rates are higher. If you play on rentler  you'll get a good feel for rent rates for different areas it has a good map feature