HELOC to Fund Downpayment on Next House Hack?

[Panos Coufos]

Hi everybody! I bought my first property in September 2023. It is a duplex and I live in one side and rent out the other. since purchasing the property with a 10% down portfolio loan through a local bank, I have done extensive repair work and renovations. The work together with appreciation suggest that I will now be somewhere between 20 to 25% equity. The bank is coming out for an appraisal so I can drop my PMI (woohoo!!).

I would like to get into house hacking another small multifamily as soon as possible. A local bank will give up to 100% LTV HELOCS (up to $400k). I am thinking about taking out 5 to 10% to fund a down payment on my next live in multifamily house hack. On property number one, I would cash flow $750 a month after mortgage, taxes, and insurance if I also rent out the unit I live in. After the HELOC, it would drop down to about $450 per month.

My goal is long term equity and appreciation, and not cash flow. Is this a wise decision to use a HELOC on property number one that only has 20 to 25% equity in it to fund a down payment for a live in house hack in multifamily property number two? I have cash reserves and money in retirement accounts, but I don't want to dip too deeply into my reserves. Thoughts? For reference, I am 30 years old and not married. Having a real estate license, I would credit the commission payed out I would receive for being my own agent towards closing costs for the new property.