How much is to much leverage?

[Jordyn Ohs]

Hi all, As the title says, how much is too much leverage at one time. I currently own 3 homes and used my heloc to front the down payments. I still have half of my heloc left. Is it better to keep adding equity by doing work on the houses while I'm renting them then refinance to recover the initial down-payment to reinvest into another property or to pay down the heloc? Or should I just exhaust the heloc and keep buying houses?  My market area is Medicine Hat AB. Any constructive criticism is appreciated. Thanks everyone.

[Jordyn Ohs]

Quote from @Chris Seveney:

@Jordyn Ohs

This is a loaded question as it really depends. For example do you have a great w2 and can you afford to cover costs of a major repair or 3 months of vacancy?

I have had 3 people email me this weekend who are over leveraged and also cash strapped in that they have repairs of $5k or more, o cash to repair and without repairing cannot release unit.

From a personal standpoint I target 70% LTV for any investment I have that way gives me ability to sell it if I need too

I'm Canadian so it a T4 up here and yes I'm I high earner who can handle vacancies if need be.  I've bought my last 3 house at fairly conservative pricing and reinvested into them. Eg roof and siding on one, all new paint and countops. Another had a basement remodel and added an ensuite on another.  First house was a house hack, so saved me a big chuck right off the bat.