HELOC for downpayment on investment property

[Bob M.]

Hello everyone,

This is my 2nd time posting on the forums, with another question regarding applying for a HELOC on my primary residence for the down payment on an multi-family investment property.

As I'm getting to the final steps of securing the HELOC, is there any reason to not have the line for as much as possible? In other words, if an initial approval came through for (hypothetical numbers) $150K, then after the appraisal of the primary residence, approval was granted for up to $250K, is there any reason to not go with the larger dollar amount?

If I understand correctly this would allow greater buying power (being able to put down a higher down payment amount) if necessary, and since the payments are only made on what is actually "used" there would be no downside.  Obviously I would still exercise caution with how much of the total allowable I borrowed, but I don't want to limit myself with a lesser available amount. 

Any feedback would be great.  Thanks, Bob 

[Brian Ellis]

What is your initial game plan with the investment property? Today it may seem like it makes sense to pull more money out, but what about a year from now? Do you plan to use this short term?

Its a good vehicle if used correctly. Me, I thought I was using mine correctly doing the BRRRR method, but after a few talks with lenders I realized I wasn't able to pull even half that money back with a refinance since I had used a conventional loan. Now im stuck with it until I can pay it off, which will be a while.