Is using home equity to purchase real estate a good idea?

[Richard V.]

I live in the Los Angeles area and housing prices are through the roof.  Does it make sense to use home equity to buy

rental property? If not, is going out of state a viable option?

[Julie N.]

I just purchased a 2 family using a HELOC on my primary residence. I didn't need to pull the money out to season- my HELOC statement showed the cash I have available - like a bank statement. Once you pull it out you start paying interest so I didn't want to do that either. My mortgage broker used my HELOC statement to show cash that I would bring to the closing table. Seasoning it wasn't an issue in CT in this case.