To HELOC or not to HELOC

[Anthony McKeen]

Hi all!

Newbie REI here. Currently in the stage of analyzing deals and figuring out my best options for financing. I'm looking to purchase a multi-family property in the 100k-150k range. I do have enough for a 20% down payment, but also own my primary residence free and clear (390k estimate per zillow) and could obtain a HELOC to cover the entire purchase price. I'm trying to decide if using a HELOC is the right decision for me. I have some concerns regarding the housing market and my home value decreasing over the next year. My goal is to have a cash flowing rental property and to build a portfolio of rental properties moving forward. Should I pay the 20% out of pocket and obtain a conventional loan? Use a HELOC for 20% down and obtain a conventional loan for the rest? Use the HELOC for the entire purchase price? Any thoughts would be greatly appreciated!