Using HELOC to BRRRR

[Jeremiah Robison]

My wife and I bought in an up-and-coming neighborhood just three years ago, but now have 130K in equity almost entirely from appreciation.  We have solid jobs and a small emergency fund.  I am interested in deploying our equity so that we can generate cash flow.  Real estate in Charlotte, NC is getting expensive fast, but this is what I would like to do:

-Open a HELOC

-Buy a distressed property (one that will qualify for a loan but still needs work)

-Utilize HELOC for the down payment and for repairs

-Rent

-Complete a cash-out refinance for the forced appreciation

-Pay off HELOC

-Look to repeat

Here is the rub:  My wife is very risk-averse, and I think the best risk mitigation is to "buy right", but I don't know how to do that without doing a direct mail campaign. I am also concerned realtors might get annoyed at me trying to find a property at 25% below ARV Less Repair Costs. It might take a while in my area.

Does anyone have any recommendations for me?  As a first time investor, how do I efficiently "buy right"?  Will I drive off quality realtors trying to find a below-market deal?

Thanks for your insights!

[Shavar G.]

@Jeremiah Robison - I’m in the process of closing on a deal in which I leveraged my equity to purchase two 4 unit properties off market at 50 cent on the dollar.  My agent, who is also an investor as well as my property manager brought me the deal.  My advice is find someone similar in your area as they are bound to have deals that they cannot do for a variety of reasons and based on the relationship you have with them and their understanding of your goals, they will become a great source of deals for you.  The trick is that you want to add value to their business FIRST and by doing so they will be more than happy to return the favor.  Happy hunting!!