170,000 HELOC, now what?

[Kyle Z.]

I recently took out a 170,000 HELOC. The plan is to buy as many rental properties as possible with it. I plan to buy with cash and then refinance and take as much back out as possible. I would like to BRRRR where possible and stretch out the 170,000 as far as possible. Is this a good strategy or flawed? does anyone see possible roadblocks I may run into?

[Anthony Dooley]

I would warn you not to be so anxious to pull the trigger on a deal that you over pay. Make sure the numbers make sense. After all, you are borrowing the money and you must pay it back at some point. You need to look at a lot of properties to find the one that works. I would go as big as you can on a multifamily deal in an area that you know very well. It needs to cash flow. Use the $170K as a down payment on a $600K apartment deal that you can add value to. If you do it right, you can increase the value enough to refinance the apartments and pay off the HELOC. Then do it again.