Using HELOC to Make "Cash" Purchase of Rental

[John Suralik]

I recently completed the renovations of my primary residence. The ARV is 195K and the first mortgage is for 78k. From talking to a few lenders who do HELOCs they will lend up to 80% of the home minus the first mortgage, so I should be able to pull out 60-80k. I would like to use this buy our fourth investment property (SFH) with "Cash" from auction or a REO that of course has equity from purchase date. The new investment wouldn't have a mortgage, but I would need the monthly income to pay for the HELOC. The HELOC that I am looking at is fixed for ten years, and when I checked a month ago the rates were 4.25% (I'm guessing rates climbed a little since then.) I am wondering what are dangers? What am I missing? What experiences do you have with this?