Pro and Cons of using primary residence equity for getting started

[Kara Johnson]

BP Pros,

Question for everyone that has been there, done that... I'm hoping maybe I can learn from your mistakes and/or gains!

We have 100K - 120K equity in our primary residence. Coming up with a down for a multi-unit on our own seems impossible...

Any advice? We obviously would love to pay our home off one day, but we also would like to move forward financially. Is this too risky???

Thanks

[Larry K.]

Dreams have come true and lives turned to nightmares over starting a business with home equity.

How it goes will depend on the success of the business.

Keep in mind that you will be at 100% debt. Downpayments are normally made with cash. Yours will be debt just like the mortgage. It is much harder to make a property cash flow this way.

Just be really careful with the numbers and make sure the property cash flows. If you have a solid plan then go for it.

By the way, using a HELOC is exactly what I did.