Using HELOC to buy first rental

[Matthew Anderson]

I wanted to run a situation by whoever wants to participate. I wanted to leverage equity on my home to buy a rental property, here would be the numbers... Criticism very much welcomed...

Price: $120,000 Down payment: $30,000 Est Closing costs: 5%: $6000 Est repairs: $20,000 (All funded by HELOC: $56,000 )

Conservative rent in the area $1600.00

PITI: $777.00

PM: $150

Vac Rate : 8% ($125)

Maintenance/repair/capex: $200

HELOC interest pymt: $350.00

A conservative ARV would be approx $190,000

Is there any circumstance where this can work?

Do cash flow rules change when deal is financed by HELOC with intentions to refinance ASAP?

For example: if refinancing to combine HELOC and original mortgage loan ($146,000)... new PITI: $1150.00 plus expenses now equal $1576

cash flow $24.00/month 

questions welcome...tear it apart, just tryin to learn

Thanks!