HELOC pros and cons discussion

[Brian Bennett]

There hasn't been much talk lately about using your home equity as leverage so I wanted to start a new conversation.  I almost feel like I could be missing something.  Is this not a good idea or is it just not that popular...

My plan is to get a HELOC and use the money to purchase two lower priced rentals. With an interest only payment being very low, I intend on using the balance of the rental income to pay down the principle. From everything that I know in this early stage, it feel like a winning plan to me.

Do you have any thoughts or insights that I might be missing?  I know this is a very simplified explanation.  These units already have property management, and tenets.  I understand that I need to keep money aside each month for the big ticket items that will need to be replaced.

I'm excited to hear your thoughts and will be more excited to hear that this posts sparks ideas or opportunity for anyone else.

Thank you 
 

[Mike Mosee]

Use the Heloc to purchase & then refi properties to pay back the Heloc.   The Heloc can then be used as your emergency fund until you build up set aside  funds from rental income.   Use the Heloc only for the rentals & the interest is tax deductible.