Financing with home equity

[Devin Haertling]

I currently have 6 single family rentals that I have financed through the equity in my home. My current equity in my home is $60,000.  My rate is 4.5% amortized over 20 years with a balloon payment due 5 years in that will roll over to a new loan for 5 years at the banks current rate doing so every 5 years until it's paid off. I pay biweekly so the 20 year loan will pay off in 17 years.  I roll closing costs into my loans as well, typically around 1000 per closing.  I self manage and I cash flow around $700 per month after mortgage taxes and insurance.  I started 3 years ago and have accumulated 6 properties all using the above method. So far I have collected 100% rents and my vacancy rate is less than 1% in that time frame. 

I welcome any positive or negative responses to my method as I am looking at trying to expand my single family to 20 units or getting into multi family.  

So far it is working but I want to be able to see pitfalls ahead before I push forward with this same method of financing.  

My bank is a small local bank and I have a very good relationship with them.  They tell me as long as the equity is there they will continue to give me new loans.