Should I use a home equity loan to finance rental?

[Jenn Cousin]

My husband and I will have our primary home mortgage paid off by July, and would like to purchase our first investment property. For various reasons, we can’t use a conventional mortgage. Would tapping into our equity ($400k) on our primary residence utilizing a home equity loan be too risky for our first investment property purchase?

We're looking at purchasing a SFH for around $40k from a family member in a LCOL area that rent comps show could bring $500-$600 in rent per month. We will probably need to put $10-15k in some minor renovations, as well.