USING HELOC ON MY RENTALS.... TO BUY MORE IN DENVER

[Tom Kaser]

I'm looking to getting a Home Equity Line on two of my rentals which will give capital to do flips or buy more rentals in the Denver area. Anyone have success with this strategy? I've spoken to a few banks and Vectra Bank in Colorado says I can go up to 80% CLTV. I mean, the equity is just sitting there, sleeping, and I want to put it to work to build more wealth. With one property I could pull out $55K and the other about $45K. So that is $90,000 in working capital I could use to do a pretty serious flip, or buy two or three more rentals.

Any thoughts BP folks?  Your input is appreciated!

Tom K

[Derek Janssen]

If u have a bunch of equity, I’m going to assume your rents support the place and the unit cashflows. I try to have every unit cashflow on it’s own.
If it still cashflows with the additional heloc payment, why not?
I have a heloc on my primary residence and saw the rate is up to 6.25%, so I’m not inclined to use it right now.
Just make sure ur comfortable with the payment if heloc rates hit 7-8%.
It’s all just math :)