Running the Numbers Using a HELOC

[Tom Blankenship]

I would say I have a quick question, but it is not so quick. My wife and I are looking at purchasing our first deal other than the investment properties that we own through our IRAs. We are focusing on local multifamily properties for now. When I run the numbers following Brandon Turner's process, I end up with very little cash flow. My problem with this is due to using a HELOC as my down payment and rehab money. If I had the cash to use for this, I would be able to clear Brandon's numbers of $100/unit and approx. 12% CoC. By using the HELOC that adds another $120-$200 per month in expenses to pay and all the deals that I am analyzing at this point are not providing much cash flow. If I look at finding fixer uppers, my HELOC payment is higher with the higher repair costs. If I look at nicer properties, then my HELOC is lower, but my mortgage is higher. So in analyzing deals where I am coming in with no money out of pocket and everything is financed using the combination of a HELOC and traditional mortgage, what is the best process to analyze the expenses (fyi, I am using the BiggerPockets calculators and accounting for all the expenses listed there). Thanks for the help!