How can I buy an REO?

[David Styles]

Well, I recently bought a house through a short sale for $110k, put 12k into it and just got an appraisal on the property for 164K. This is my first home and I'm really just sitting around grinning from ear to ear as it was only a few months ago that I had myself convinced I'd never be able to afford my own home.

The whole process almost seemed too easy and to tell ya the truth, I left a ton of money on the table, yet still came in ahead. I feel like this experience is entirely repeatable and the next time around the gains will be even greater.

I've been collecting lists of REO properties from an agent friend and there are just tons of deals out there. I want to buy an investment property, but I'm not exactly sure how to go about doing so. I'm almost certain that nobody will give me another loan and private money is kind of out of the question at this point as I do not want to be responsible for anyone elses money but my own.

I'm a total rookie but here is what I'd like to do:

Tell me if this impossible or unreasonable:

1. Take out a HELOC to cover 20% down on a new loan
2. Buy an REO at a great price
3. Rehab it with cash from 0% APR credit cards
4. Get it rented out/lease option
5. Cash out refi
6. Hopefully pay off HELOC and CCs
7. Stupid?

Thanks guys!