To HELOC or not to HELOC

[Scott Wiliamson]

Hello BP members,

So I have been gaining my education on real estate investing through BP (thank you all I can't express how awesome of a community this is) ], reading books and other searches on the internet. I have been analyzing deals in my local neighborhood and feel I am ready to make some offers when I find the next good deal.

WHEN I find the next deal is the key word. I don't want to rush it, so I like the flexibility of a HELOC over that of a cash out refi. I have a traditional loan on my house and have been renting it out for the past 5 yrs. It is doing great as a rental but we moved back into town and will be moving back in when tenants move out in 2 months. My plan is to get a HELOC and start making offers. When 1 of my offers goes through, I will use the HELOC for the down payment and get a traditional loan for the remainder. At that point I will do a cash out refinance (on my primary house) to pay back the HELOC. Is this a good decision? Do y'all (that's right I'm from Texas) see any issues with my plan? Little more details below:

Primary residence (in 2months) is market valued at 160k and my loan principle is at 65k. I talked to current lender about cash out before and I want to keep loan down so when I rent it out again I will still cash flow. This means the max I will use for the HELOC is 50k. That way when I do the cash out refi it will fully pay off HELOC and not increase monthly payments. If there is any details I left out I apologize I'm still learning. Is this a solid plan?